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Protecting estates and children if there is a remarriage

New Jersey residents will want to make certain that they formulate a coherent and well-crafted estate plan to ensure that their loved ones are cared for after they are gone. These documents can address many different aspects of a person's life. Wills, trusts, the estate tax, to whom the inheritance will go - all are important. While it might be difficult to think about, a person who is creating an estate plan must account for the possibility that a spouse will remarry. Going beyond the emotional reality of this, there are financial ramifications to it and it can affect other heirs.

When an estate goes to the spouse and he or she remarries, the assets that were earmarked for children from the relationship might no longer go to the children. After the remarriage, if the spouse dies before the new husband or wife, then the assets will likely be controlled by that person. There is a way to handle this. It is called the Family Wealth Trust. This is a way to protect assets when there is a remarriage. The document stipulates that when the person dies, the assets will be placed in a sub-trust that is separate and irrevocable. The children will be the beneficiaries.

The spouse will be the trustee and that which is in the trust can be used, but that person does not control what is in it. The ownership will be left to the children. The condition is that if the spouse remarries and does not have a prenuptial agreement, he or she will not be able to access what is in the trust. This protects the children. This strategy also avoids the estate tax - something that is important for those who have substantial assets.

A Family Wealth Trust is just one way for a person to protect assets without having to worry about various uncontrollable issues after they are gone. For assistance with determining the best course of action for one's situation, discussing a case with a legal professional experienced in trusts, estates and wills is imperative.

Source: forbes.com, "What Happens If You Pass Away And Your Spouse Remarries?," Mark Eghari, June 28, 2017

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