Today, roughly one in four divorces involve those over age 50, and the trend has garnered its own nickname: “Gray divorce.” The divorce rates for this demographic have doubled in the past 30 years and tripled for those over 65, according a study. According to Bloomberg.
According to Bloomberg.com the standard of living for women drops by some 45 percent, and roughly 21 percent for men. Given the significant decrease in income and the fact people are living longer, it’s no surprise that many folks choose to remarry.
And those who do get remarried bring children from previous marriages into the new union, increasing the number of blended families. Regardless of age or marital status, all adults over age 18 should have some basic estate planning, but for those with blended families, estate planning is particularly vital.
Blended families who have yet to create a plan or fail to update their existing plan following remarriage are putting themselves at major risk for accidentally disinheriting their loved ones. Such planning omissions can have terrible unintended consequences.
Here are two different hypothetical scenarios to show how a failure to update your estate plan after a remarriage has the potential for devastating consequences and how these negative outcomes by updating your estate plan after you remarry.
Scenario 1: Accidentally disinheriting your children from a previous marriage.
John has two adult children, David and Alexis, from a prior marriage. He marries Moira, who has one adult child, Patrick. The blended family gets along well, and because he trusts Moira will take care of his children in the event of his death, John leaves everything to Moira.
After just two years being married, John dies suddenly, and his nearly $1.4 million in assets go to Moira. Moira is extremely distraught following John’s death, although she planned to update her plan to include David and Alexis, she never gets around to it, and dies just a year after John. Upon her death, all of the assets she brought into the marriage, along with all of John’s assets, pass to Moira’s son Patrick, while David and Alexis receive nothing.
By failing to update his estate plan to ensure that David and Alexis are taken care of, John left the responsibility for what happens to his assets entirely to Moira. Whether intentionally or accidentally, Moira’s failure to include David and Alexis in her own plan resulted in them being entirely disinherited from their father’s estate.
Scenario 2: Accidentally disinheriting your spouse.
Mark was married to Gwen for 30 years, and they had three children together, all of whom are now adults. When their kids were young, Mark and Gwen both created wills, in which they named each other as their sole beneficiaries. When they were both in their 50s, and their kids had grown, Bob and Gwen divorced.
Several years later, at age 60, Bob married Veronica, a widow with no children of her own. Bob was healthy, so he didn’t make updating his estate plan a priority. But within a year of his new marriage, Bob died suddenly in a car accident.
Bob’s estate plan, written several decades ago, leaves all of his assets to ex-wife Gwen, or, if she is not living, to his children. State law presumes that Gwen has predeceased Bob because they divorced after the will was enacted. Thus, all of Bob’s assets, including the house he and Veronica were living in, pass to his children. Veronica receives nothing, but a statutorily allowed life estate in the home so long as she can afford to live there.
By failing to update his estate plan to reflect his current situation, Bob unintentionally disinherited Veronica and forced her into a precarious financial position just as she was entering retirement.
Bringing families together
Along with other major life events like births, deaths, and divorce, entering into a second (or more) marriage requires you to review and rework your estate plan.
This article is a service of Lasca Arnold Pendley. I don’t just draft documents; I ensure you make informed decisions about life and death, for yourself and the people you love.
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