Later-in-life marriages can add a great deal of joy and comfort to your life -- and without the complexities created by having young kids at home or a stressful full-time job. However, these marriages carry with them their own legal and financial concerns, particularly if either you or your spouse enter the marriage with a substantial amount of assets. How can you provide for your spouse after your death without shortchanging your children or other heirs?
If your spouse has enough assets to support him or herself without your Social Security, pension, or other retirement income -- but doesn't want to leave your marital home -- he or she may benefit from a life estate. This is a legal interest granted in a home that will ensure that your spouse can stay there for the duration of his or her life. This interest is non-transferrable, so your spouse's children won't be able to move in after your spouse's death (or transition to a nursing home or assisted living facility). Instead, this house will be probated after your spouse's move or death, and the proceeds from sale will be distributed to your named heirs.
Granting your spouse a life estate in your marital home can give you the peace of mind of knowing that he or she will never be without a place to live, while ensuring that this asset is preserved for your children or heirs -- not your spouse's future partners.
A trust is an excellent financial planning tool that can be used independently or in conjunction with a home subject to life estate. By establishing a trust, you'll be able to avoid commingling assets with your spouse and help keep these assets in a form that will make probate simple and stress-free for both your spouse and heirs.
There are a number of different types of trusts that may be available in your state. Some trusts allow you to continue titling items in the trust's name during your life, while others are created at your death through your will. If you'd like to provide your spouse with some income after your death, you may want to create a trust that will hold and disburse money for your spouse's benefit for the rest of his or her life following your death. Any assets that won't be needed for support will then be distributed to your heirs.
If you're interested in granting your spouse a life estate in your home or establishing a trust, it's worthwhile to visit an estate planning attorney licensed in your state to help you set up these legal and financial vehicles. Do-it-yourself estate planning has become quite popular, but when you're dealing with substantial assets, one simple mistake may be enough to completely change the distribution of your estate. More about this topic can be found here.Share
22 July 2015
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