Kansas and Missouri Estate Planning

What are Some "Remarriage" Estate Planning Risks?

Love does not mean smooth sailing.

More is not always better.

Especially when it comes to marriages.

According to a recent Cleveland Jewish News article titled “Estate planning documents for second marriages,” multiple marriages means more complicated estate planning.

Why?

With remarriage, you and your new spouse likely are bringing in separate assets, children from previous marriages, and even financial obligations.

What does this mean?

In addition to wedding planning, you need to make estate planning a priority.

Without reviewing and updating your estate plan, you could also disinherit your new spouse and instead leave your ex-spouse financially secure.

To prepare for your new life, you also each need to address cost-sharing, college funding, income taxes, pensions, 401(k)s, and prenuptial agreements.

What about if you do not plan to marry again?

You still need to work through these issues with an experienced estate planning attorney.

If not, you could accidentally disinherit your own children when you die while leaving everything to your new spouse and step-children.

Chances are you do not want this to happen.

What should you do?

Work with an experienced estate planning attorney to create a plan to meet the needs of your blended family.

Make your plans legally binding whether this includes a trust, premarital agreement, or updating beneficiary designations and power of attorney documents.

Estate planning is a great start to marital bliss.

Reference: Cleveland Jewish News (May 7, 2019) “Estate planning documents for second marriages”

Should My Intended and I Have a "Money Talk" Before We Wed?

Money is an important premarital conversation.

You are getting married.

Your life has become a flurry of planning for venue, food, florists, and clothing.

Certainly, the plans are important to the wedding.

However, it is also important to prepare for your marriage beyond the big day.

According to a recent Wealth Advisor article titled “How to Protect Your Assets Without a Prenup,” discussing finances is key to preparing for your marriage.

Marriage involves building a life together.

Unless you are getting married right out of high school or college, you probably will be building off of two distinct lives.

You may have assets saved.

Your spouse may have student debt.

If either of you were previously married, alimony and child support may be a reality.

In merging two separate lives into one, you may consider a prenuptial agreement.

You are not planning on divorce.

You are merely protecting what you have.

For example, keeping certain assets separate could protect at least one of your incomes from creditors.

It becomes a safety net for your life together.

If a prenuptial agreement is not an option, there are still ways to protect your assets.

How?

Keep separate accounts.

The money you brought can remain your money.

You can open a joint account together after marriage as your household "operating" account.

Any money you make after marriage can go to this account and be used for your life together.

Title property separately.

If the home is yours and you choose to keep it under your name, it should be your responsibility.

Any improvements and payments should be paid from your separate account.

Keep organized records.

This can help protect the property as your own.

Record Everything.

If you make acquisitions with your separate account, you should keep records.

This shows the acquisitions are yours alone.

Also do this with gifts or inheritances.

Showing separation of moneys and assets via a detailed paper trail will help establish and confirm ownership should it be required at a later date.

It should be noted that some appreciated assets could be deemed marital property.

How is this determined?

If the property appreciated passively such as a public stock, it is separate if under your name.

If the property appreciates actively, the appreciation could be considered marital property.

A house would be one example of active appreciation.

It is helpful to include others in your financial planning as a couple.

An experienced estate planning attorney or financial advisor can educate you on your options.

Reference: Wealth Advisor (May 19) “How to Protect Your Assets Without a Prenup”

What is "Predatory" Marriage?

Beware of predatory marriages.

Motives for marriage are not always pure.

We like to believe in love.

The reality?

Some people marry for money.

According to a recent New York Law Journal article titled “Predatory Marriages and the Elderly: A Legislative Solution,” many gold diggers target the elderly.

At high risk are mentally incapacitated seniors.

Yikes!

Does this sounds familiar regarding a senior loved on in your life?

If yes, then it could be a sign of elder abuse.

What should you do?

If your loved one seems to be in danger of becoming a victim of a predatory marriage, talk to him immediately.

Having an estate plan in place can be also prove helpful.

Why?

An estate plan specifically excluding the identified predator may make the future marriage less appealing, especially if there is a premarital agreement.

What can you do if the loved one is already married and has died?

There may be little you can do.

You can possibly challenge the marriage as being made while the senior lacked capacity to enter into the contract.

This is not a guaranteed solution, and the burden of proof belongs to you.

The best way to protect your senior loved ones is to be ever vigilant.

Prevention is far more effective than damage control.

Reference: New York Law Journal (May 16, 2019) “Predatory Marriages and the Elderly: A Legislative Solution”

Should I Review My Estate Plan?

Life change usually means estate plan updates.

You have an estate plan.

Maybe you created one when you turned 18 to ensure you were covered as you stepped into your future.

Perhaps you did not create your estate plan until you were married or had a baby.

The fact is you took the steps to create a legally binding estate plan.

Congratulations!

According to a recent Bankrate article titled “Estate planning triggers: When to re-evaluate your estate planning strategy,” keeping your estate plan current is as important as its initial creation.

This means you should be reviewing your estate plan with your estate planning attorney every few years.

You also need to review your plan after certain life triggers.

What are they?

Marriage.

Finances and future plans are important discussions to have before you tie the knot.

As you merge your lives, you need to update your estate plan to account for your spouse.

If you decide to keep things fairly separate, you may want to set up a prenuptial agreement.

Working with an experienced estate planning attorney will help you create a plan to satisfy both of you.

Remember, you need to be represented by separate attorneys for the prenup to be good to go.

Children.

If you have children, you need to plan for their care should the be orphaned.

Do they receive any of your assets?

If yes, how much, when, and how?

Does the inheritance need to be protected "from" or "for" them ... or perhaps both?

What happens if you and your spouse both die?

Who will rear your children?

Nominating guardians in a last will and testament ensures your children are reardd by a person of your choice rather than someone appointed by the court.

Divorce.

Divorces are not pleasant and can often be messy.

Not updating your estate plan certainly can make this even messier.

For example, if you do not update your beneficiary designations on a life insurance plan, your ex-spouse could receive these funds.

Yikes!

Retirement.

Retirement may be the first time you look at your 401k or your Roth IRA accounts in years.

Chances are much has changed.

Be sure to review and update beneficiary designation on the accounts.

By the way, the same thing goes as with life insurance and an ex-spouse inheriting.

Was this an exhaustive list?

No.

It named but a few major life events.

There are plenty more.

You should also review your assets if you move, have a significant increase or decrease in wealth, someone named in your plan dies or becomes disabled, tax laws are reformed, or your number of living children change.

Set up a time to meet with your estate planning attorney to ensure your plan meets your current situation.

Reference: Bankrate (March 4, 2019) “Estate planning triggers: When to re-evaluate your estate planning strategy”

Do I Need a Prenup if Remarrying After Age 50?

If you are older, you have more to lose.

You are older than 50.

Maybe you have been married before.

Maybe this marriage is your first.

Whatever your situation, you are have devoted decades to working and building your own assets.

According to a recent Forbes article titled “All About Prenups For Second Marriages,” this fact means a prenuptial agreement is a wise decision.

You have more to loose and more to consider than an individual who marries in his or her 20s.

When Gretchen and I married at age 22, I was headed into law school and she for her graduate degree in accounting.

We had no assets, together or individually.

Things were pretty simple

On the other hand, you likely have retirement funds, a home, pensions, or even children from a prior marriage.

This is a lot to consider.

What should you and your new spouse discuss and include in a prenuptial agreement?

First, you need to distinguish between separate property and marital property.

Separate property usually includes what was brought into the marriage as well as any future inherited property.

Marital property is what the spouses build together.

This can become more complicated if you are both retired.

What if one of you does not have the assets to support yourself individually in retirement should something happen?

A prenuptial agreement can help you discuss these issues and come up with a mutually beneficial solution.

A prenuptial agreement can help you set expectations and create a plan to leave an inheritance to both your children and your current spouse.

A prenuptial agreement can also be critical in the case of divorce.

It can protect both of you from draining income in divorce battles, as well as provide security for your separate assets.

A prenup protects for more situations than divorce.

Work with an experienced attorney when creating a prenuptial agreement to set you and your family up for success.

Reference: Forbes (February 13, 2019) “All About Prenups For Second Marriages”

How do I Avoid "Disinheriting" My Own Children when I Remarry?

Remarriage can complicate life.

You were married before.

You have children from that marriage.

You love and adore them.

You also are getting remarried.

You love and adore this person as well.

Can your assets, like your love, be there for all of them?

According to a recent CBNC article titled “Remarried after having kids? Here are tips to avoid accidentally disinheriting them,” this is not impossible.

It will not, however, happen by accident.

You will need to be intentional in your estate planning.

If you do not have a will, even a basic will, you are risking disinheriting your children.

Yikes!

If you are getting remarried and are older, you are likely bringing plenty of your own assets into the new union.

Your estate plan must be prioritized as part of the planning for your wedding.

What steps do you need to take?

Review beneficiaries.

Not all assets pass through a will.

Retirement accounts, life insurance policies, and other accounts pass through beneficiary designations.

This means the individual named as the beneficiary on the asset will receive the asset even if your will indicates someone else.

Consider your home.

Will you and your new spouse be jointly owning your new home?

If yes, you may be unable to leave your share to your children.

This is contingent on state law and the titling of the property.

Usually, “tenancy by the entirety” or “joint tenancy with right of survivorship” will pass ownership directly to the other owner.

If your home is owned in “tenancy in common,” you could leave your share to your children.

Pass personal property.

Are there certain family heirlooms or sentimental items you want to leave with your children?

If yes, you should create a detailed list that is "incorporated by reference" in your will.

This leaves no room for interpretation or confusion, especially when emotions can run high.

Create a Power of Attorney.

What happens if you become incapacitated?

Who will pay your bills and file tax returns on your behalf?

Who will make medical decisions?

A durable power of attorney is essential in these situations.

You can even appoint different people for health care and for financial decisions to divide responsibilities.

Write a Health Care Treatment Directive.

Do you have strong opinions on the level and duration of any life sustaining care you would like to receive?

If yes, do not leave these decisions to your loved ones.

You can provide written directions yourself in a health care treatment directive.

Doing so can remove stress and decrease tensions within a blended family.

Care for all of your loved ones.

Do your estate planning now.

Reference: CBNC (January 17, 2019) “Remarried after having kids? Here are tips to avoid accidentally disinheriting them”

Why are Prenups Increasingly Popular with Millennials?

Having a prenuptial agreement may a good idea.

Many people desire romance.

It is an undeniable fact, given the success of Hallmark Christmas movies!

Prenuptials, however, are not considered romantic.

According to a recent CT Post article titled “Millennial Millionaires and Their Prenups-What They Need to Be Thinking About,” they have their benefits.

Prenuptials are popular among millennials.

How so?

Use of them has increased five times in the past twenty years alone.

Are you an entrepreneur?

Perhaps you should protect yourself and the fruits of your labors.

As people wait longer to get married, they are each bringing their own wealth into a marriage.

This means they have more to lose in assets, if they lose the marriage.

Some assets are fine to share in marriage such as income and a family home.

Investment properties should be separate.

How do you protect yourself?

Talk with an attorney.

Business attorneys understand contingencies, but in my experience family law (read "divorce") attorneys are more experienced when it comes to "unwinding" a marriage and its assets.

That noted, if you do have one or more business interests, then perhaps you should consider having both family law and business law attorneys in the mix.

The attorney should be able to plan for the future.

By the way, you and your fiancé should have separate attorneys.

Plan thoroughly.

Start early.

Drafting these documents takes time.

If you or your partner have foreign accounts or residencies, you should know this will take even more time.

Getting a prenup may seem like a lot of unnecessary work if you are planning to be married forever.

Creating an arrangement now will make things far simpler in a worst case scenario.

After all, that is why we make legal plans in advance.

Reference: CT Post (November 5, 2018) “Millennial Millionaires and Their Prenups -- What They Need to Be Thinking About”

Are Prenuptial Agreements Expensive?

Prenuptial agreements can save money in the long term.

Having a prenuptial agreement prepared is not a DIY project.

It should be prepared by an attorney who regularly prepares them ... and a lot of them at that.

That noted, how much does a prenup cost?

According to a recent Stamford Advocate article titled “You don't need to be rich to get a prenup — here's how much you should expect to pay,” this hinges on multiple factors, to include the three rules of real estate: location, location, location.

On average a prenuptial agreement will cost about $2,500.

It can be as low as $1,200, if your finances and family affairs are pretty straightforward.

If you live in a large city or have complex assets and relationships, then your cost could be as high as $7,500 to $10,000 per party.

Yikes!

Does this mean you should opt to not have a prenuptial agreement simply because of the cost or choose the cheapest option?

Nope.

As you might expect, the cost of a prenuptial agreement will vary depending on the reputation and the experience of the attorney.

It will also depend of your specific circumstances.

Many times an hourly charge will be applied to take into account the potential need for extended negotiations.

To save some time and money, talk with your partner before meeting with your respective attorneys.

You should also know the extent of one another's assets (and liabilities).

If you consider what you have to be worth protecting, then the cost of a prenuptial agreement should not deter you.

This is especially true if you are forming a blended family.

Love may be blind, but it is best to approach a remarriage with both eyes wide open.

Reference: Stamford Advocate (October 20, 2018) “You don't need to be rich to get a prenup — here's how much you should expect to pay”

Why is Sandra Bullock Requiring a Prenup?

Divorce can create trust issues.

While we are not necessarily defined by our pasts, our experiences do influence are actions.

According to a recent RadarOnline.com article titled “Sandra Bullock's Prenup Revealed,” this is the reason Sandra Bullock is asking for a prenup.

Sandra Bullock is engaged to Bryan Randall, but she was previously married to Jesse James.

[That is Jesse James of West Coast Chopper fame, not Jesse James the notorious Wild West outlaw and member of William Quantrill's guerilla force that murdered my ancestor Heinrich Meins during the Civil War in Concordia, Missouri, and laid waste to my hometown of Lawrence, Kansas. Two completely different fellows, although apparently related. But, I digress.]

The Bullock-James marriage was tough and ended in 2010.

Bullock is far more cautious with her new relationship.

Once burned.

Twice shy.

Randall and Bullock have been dating since 2015.

He offered to sign a nondisclosure agreement, promising to never discuss their relationship publically even if it were to end.

Bullock has requested a prenuptial agreement as well.

What would the prenup include?

Randall must move out of their homes and return all keys and remotes for gates and garages.

He may take nothing with him, unless it was given to him by Bullock as a gift.

Her business manager and lawyer will keep a list.

Bullock will retain sole legal rights to her adopted children.

Not all prenuptial agreements have this many restrictions.

Every agreement is subject to the needs of the particular couple.

If you and your soon-to-be spouse are each bringing your own assets to the marriage, then you may want to consider a prenuptial agreement yourself.

This is especially true, if you want to avoid unpleasant, unintended consequences like disinheriting your respective children.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Radar Online (July 27, 2018) “Sandra Bullock's Prenup Revealed”

What is Unique About Estate Planning for Blended Families?

Estate planning for blended families will be more complicated.

Have you been married one or more times before?

Have you found someone new to love?

Are you willing to give matrimony another go of it?

According to a recent Hometown Life recent article titled “Blended marriages take careful estate planning,” before you say “I do,” you should discuss your estate plans.

This is especially important if children from are previous marriage are involved.

Why?

Each of you may have different ideas regarding whether or how to provide for these children in your estate plan.

Your new spouse is not obligated to leave anything to your children, should you leave everything outright to your new spouse.

If the child was adopted by your new spouse, then the rules are a little different.

If you have children together, you are legally bound to these children.

Does this mean you have to leave an inheritance to them?

No.

It does mean you need to address them in your estate plan.

If you choose to disinherit, you need to specifically state this.

As you and your new partner make estate planning decisions, you may decide to discuss them with your adult children.

If your family is not close, this may not be necessary and could even be counterproductive.

On the other hand, it may be best to clear the air and be transparent while you are living so you can anticipate what will happen when you are not.

Blended families make estate planning more complex.

Depending on your unique circumstances, there may be even more people to consider and more factors involved.

Do not do this alone.

Love may be blind, but it is only prudent to enter into remarriage with both eyes wide open.

Work with an experienced estate planning attorney to discuss your specific situation.

He or she will be able to create a plan to meet your needs.

So, how do you find an "experienced" estate planning attorney?

First, ask around. Friends, family and other professional advisors are trustworthy sources.

Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").

Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.

How?

Two helpful online resources are just a mouse click away to assist with your due diligence:  Avvo.com and Lawyers.com.

Check any Avvo ratings, client ratings/testimonials and attorney endorsements on Avvo.com and any "peer ratings" by judges/other attorneys and any client ratings/testimonials on Lawyers.com.

In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Hometown Life (May 31, 2018) “Blended marriages take careful estate planning”