If you are about to remarry there are many legal and tax issues to consider.
Prior to marriage you should think about a prenuptial agreement (Also called an antenuptial agreement). This is a document that must be entered into prior to marriage by both you and your future spouse. The Prenuptial Agreement will set forth how assets are distributed during life, on death and upon any possible subsequent divorce. Both the parties should have their own attorney to make the document more readily enforceable.
Wills and Trusts
Both spouses should revise their wills and trusts. If there are children from a prior marriage then consideration needs to be given to how to protect the children from a prior marriage. For example if Husband has children from a prior marriage and he wants his children to inherit money on his death a will may not be sufficient. Under Ohio law a surviving spouse has a right to elect a portion of the probate estate even if the will states the assets go to the children. An easy way to avoid this right of a surviving spouse is to avoid probate with beneficiary designations or have a living trust hold the assets. The right of surviving spouse only applies to probate assets with the exception of certain assets described below.
However, if the spouse wants to provide for the surviving spouse, you should consider a marital trust. Under a marital trust upon the death of the first spouse, assets are available for the surviving spouse, but the trust mandates that on death the assets pass to the children of the first spouse.
For example on the death Wife her assets pay into a marital trust for the benefit of Husband, but on Husband's subsequent death, the assets pay pursuant to the marital trust to the children of the Wife from the first marriage.
A trust is a private document so the choice of trustee to manage the marital trust and follow its provisions is very important.
Durable Financial Power of Attorney
A durable financial power of attorney gives the holder of the power the ability to sign legal documents on your behalf, control assets and possibly give your money away. In all situations a power of attorney is an important document but especially in second marriages. Should the new spouse be given the authority to handle your affairs? Your children from the first marriage? Should you have joint power holders? There is no right or wrong answer. But these decisions can have a major impact on the disposition of assets.
Retirement Assets/ Life Insurance
In some states a spouse has a statutory right to certain assets such as IRA and life insurance. There is no such right in Ohio. However, under the Federal Pension Law, ERISA, a spouse has a right to your retirement benefit. In particular under a 401k plan the spouse is the beneficiary of your 401k plan if you pass away unless your spouse waives that right. Similar rules apply if the retirement plan pays out as an annuity.
You should review the beneficiary designations on all your assets. Ohio law presumes that upon divorce your ex-spouse is no longer a beneficiary, but Federal law does not do that. So it always makes sense to review your beneficiary designations for retirement assets, life insurance , annuities and other accounts and make sure your beneficiary designation are up to date.
Under Ohio law once you are married, your spouse has a dower interest in your house even if it was owned by you prior to marriage and is only in your name. You need to decide what you want to do with the house. You could title it in a trust as described above or have it in a joint and survivor deed. You can even name a beneficiary of your house other than a spouse with a transfer of death affidavit if your spouse releases his or her dower interest.
If you have any questions please contact Michael Solomon, Solomon, Steiner & Peck, LTD. at email@example.com or call 216-245-0185.