You want your spouse to be financially secure. You also want your children to receive the inheritance you intend for them. After remarriage, accomplishing both goals takes careful coordination.
An arrangement that seems straightforward during life can produce unexpected results after death. Before deciding who receives each asset, consider what your spouse will need, what you want to preserve for your children, and who will control the property along the way.
Leaving Everything to Your Spouse May Not Preserve an Inheritance for Your Children
Consider a hypothetical couple who each have children from a prior relationship. They leave everything to each other, expecting the surviving spouse to divide what remains among both families.
That arrangement may work as intended. But an outright inheritance generally gives the surviving spouse control over the inherited property. Unless a binding restriction applies, the survivor may change beneficiaries, make gifts, or use the assets for living expenses and care.
Even when everyone acts in good faith, there may be little left for the children.
Discuss whether your goal is to give your spouse unrestricted ownership, provide support while preserving a remainder for your children, or divide assets between them at your death. These choices call for different planning.
A Trust Can Address Support and Inheritance Goals
A properly designed trust may allow assets to support a surviving spouse while directing the remaining trust property to specified beneficiaries.
The details matter. Your plan should address:
- Whether the spouse receives income, principal, or both
- What expenses the trustee may pay
- Who decides when distributions are appropriate
- Whether the spouse can change the eventual beneficiaries
- Who serves as trustee and as a backup
A trust does not guarantee that a particular amount will remain. Investment performance, permitted distributions, taxes, and care expenses can affect the balance. Its purpose is to establish enforceable instructions that reflect your priorities.
Make a Specific Plan for the Family Home
A home often carries both financial and emotional importance.
If you want your spouse to remain in the home while your children eventually inherit it, discuss the practical details before signing documents. Who pays the mortgage, property taxes, insurance, and repairs? What happens if the spouse moves, needs residential care, or wants to sell?
Leaving those questions unanswered can put a surviving spouse and adult children in a difficult position. Clear instructions can help everyone understand their responsibilities.
Retirement Accounts Need Separate Attention
Your will does not automatically update your retirement beneficiaries.
Review the beneficiary records for each IRA, workplace retirement plan, and pension. Different accounts have different rules. Many workplace plans protect a spouse’s survivor rights and require written spousal consent before another beneficiary can receive those benefits.
Do not assume that a prenuptial agreement alone satisfies a retirement plan’s consent requirements. Follow the plan administrator’s procedures and obtain advice before making changes.
Naming a trust as a retirement beneficiary also requires careful review. Distribution rules and income taxes can affect how well that arrangement serves your spouse and children.
Oregon Spousal Rights Must Be Considered
Oregon law allows a surviving spouse to claim an elective share in qualifying circumstances. The calculation can involve more than assets passing through probate.
Keeping property in your name or leaving it to your children does not, by itself, resolve a spouse’s potential rights. A marital agreement may be relevant, but its wording, enforceability, and coordination with the estate plan require legal review.
Start with a Shared List of Priorities
Before meeting with your attorney, discuss three questions:
- What financial support should the surviving spouse have?
- What property or inheritance should be preserved for each person’s children?
- Who should manage the plan if family members have different interests?
Bring your existing wills and trusts, any marital agreement, current deeds, and beneficiary information.
At Hillsboro Law Group PC, we help Oregon families coordinate their estate plans with their family circumstances and goals. Schedule an Estate Planning Strategy Session to discuss creating or updating your plan.
General information only. Not legal advice. Planning recommendations depend on your circumstances.