Proper planning must be done to benefit, or not to benefit, the spouse (for Medicaid planning purposes, leaving a financial benefit for the spouse may hurt eligibility for government benefits). Here is a true story about something unexpected: a man got a “ghet”, which is a Jewish divorce from his wife, but he never filed for an official civil divorce because he wanted her to be able to claim a part of his Social Security pension. He did not know that staying legally married was unnecessary, and his wife could have claimed the pension even after a divorce. Thus, although the man lived with another woman for 20 years and considered her his wife, his official wife still had rights.
When the man passed away, his wife, from whom he was never divorced, claimed her elective share—the right to some of his property, which a surviving spouse can make even against the Will of the deceased. The elective share is the greater of $50,000 or one third of the net estate regardless of what the Will leaves for the spouse. The woman he called wife had to spend money on legal bills to defend her rights. The law is complicated, and certain transfers during the decedent’s lifetime are considered part of the estate for the purposes of elective share, which is exactly what happened in that case. Therefore, proper estate planning and formalization according to the law is key, or people you love will pay the price.
Divorce rates in the United States are high—approximately 50% overall, and over 25% for individuals over 50 years old. What that means for you is that, if you do get divorced and decide to remarry again, or even if you are in a relationship, you should take steps to protect the interests of your children and grandchildren from first marriages. Otherwise, it may happen that the children of your new spouse who are not your children will get the money you earned before your remarriage, instead of your children to whom the money rightfully belongs.
The common reaction is “I have nothing that the other person or their children can take”. But stop and think: a house, apartment, pension plans (especially with survivor benefits), and retirement accounts must all be considered, not just the money you have in the bank or stocks, bonds and other liquid assets. For example, after 10 years of marriage, a former spouse may be entitled to payments equaling half of the benefits of the other after reaching 62 years of age. Of course, there are important qualifications and restriction that determine who is entitled and to what amount.
It is essential to revise wills and, where possible and practical, trusts and other forms of estate planning. Your tax issues, health care issues, health care decision making, and long-term home care and nursing home care must be contemplated. It makes sense to sign a prenuptial agreement before getting married that clearly delineates the rights and responsibilities of both spouses. Both parties may have separate assets before the marriage, separate families, and obligations that must all be taken care of. A qualified attorney will help you plan your second marriage and make sure your loved ones are protected.