5 Top Financial Things To Do For A Second Marriage
1. Full Disclosure Before you get married, you and your fiancé should discuss all aspects of your financial situations with one another. On a piece of paper, write down your: Credit History. Have you ever been late on payments, or had any judgments against you? Have you ever declared bankruptcy? Debts. How much do you owe to credit cards? What other debts do you owe? Assets. Include your annual earnings, the value of your home, cars, investments, and retirement plan funds. Obligations under a previous divorce decree. Make sure your intended is aware of any child support or alimony payments you are required to make (including how much), as well as any disability, life, health or long-term care insurance that your settlement says you must keep in effect. You should also let your partner know if your ex-spouse has rights to any of your future retirement plan earnings. When you’re done, exchange papers with your fiancé. Expect your answers to trigger discussion about who is responsible for debts incurred before the marriage, whether you will share assets earned by one of you, and how you will meet financial obligations from a previous marriage. Your next step is to consider drafting a prenuptial agreement. A “prenup” is especially important if you 1) are bringing significant assets into the marriage, 2) expect to inherit a business or other assets in the future, or 3) have children from a previous marriage. 2. Protecting Your Assets Typically, those who remarry are older and wealthier than the first time they married. As such, you often have more interest in protecting assets you bring to the marriage. Many high-earners also are interested in protecting assets they’ll earn during the marriage. A prenuptial agreement will ensure that your assets will remain separate from your spouse’s, and that the spouse cannot claim a portion of your assets if you divorce. 3. Protect Your Children Prenuptial agreements also can be useful if you have children from a prior marriage and want to ensure that your assets pass to them when you die. Generally, unless your spouse specifically waives his or her right to the assets in a valid agreement, he or she may claim a portion of your estate when you die. Take John, for instance. A successful internist, he was 45 years old when he married his second wife, Melanie. To protect his two children from a previous marriage, John established a trust and named the children as beneficiaries. That way, the $2 million in assets he’d earned before his second marriage would go to the children when he died and not to Melanie. But John’s plan may be sabotaged if Melanie decides to sue for a share of the money when he dies. Virtually every state has a law that entitles a surviving spouse to a portion of the estate — even if your will or a trust says otherwise. If Melanie does not expressly waive her right to the money in a prenuptial agreement, John’s children could lose a third of their inheritance should she demand part of the money. If you’re like most, however, you […]
Read moreWho Will the Court Appoint as Guardian for Your Children?
If you die without a Will that appoints a guardian for your children, it will be left up to the Court . The Court will consider what is in the child’s best interest. It may not be who you would want appointed as your child’s guardian. There are certain people who are ineligible to be appointed as guardian according to the Texas Probate Code. These include: A minor; People whose conduct is notoriously inappropriate; An incapacitated person; A person who is a party or whose parent is a party to a lawsuit concerning or affecting the welfare of the proposed ward; A person indebted to the ward unless the person pays the debt before appointment; A person asserting a claim adverse to the proposed ward or the proposed ward’s property, real or personal; A person who because of inexperience, lack of education, or other good reason, is incapable of properly and prudently managing and controlling the ward or the ward’s estate; A person, institution, or corporation found unsuitable by the court; A person disqualified in a declaration made by the ward prior to incapacity.
Read moreHave you recently lost a loved one? What are the next steps?
Texas has simplified the probate process that allows certain executors to serve independently of the Court’s supervision. This allows the probate process to move quickly and efficiently in a process called independent administration. How does an Executor become “independent”? An executor can be independent if — 1) the Decedent left a Will in which he specifically states that his executor should be independent, or 2) if the Decedent died without a Will or his Will did not allow for the independent executor, all of the heirs or beneficiaries under the Will can agree to allow the Executor to serve as the Independent Executor. What are the Benefits of an Independent administration? The independent executor does not have to post a bond and does not have to obtain the Court’s approval prior to undertaking the duties. What are the responsibilities of the independent executor? The independent executor’s responsibilities are 1) collect the assets, 2) pay off any debts, and 3) distribute the assets according to the Will or according to Texas law if the Decedent did not leave a Will. As part of this process, the independent executor is also required to satisfy a couple of requirements to the Court — 1) to publish notice to potential creditors in a newspaper and 2) to file an inventory with the Court showing the assets of the estate. When do I need to probate the will? It is advisable to initiate the probate process as soon after someone’s death as possible, it must be done within 4 years of their death, or the process by which their estate is divided becomes much more complex. When is the Independent administration not a good idea? Estates with high debts may choose a dependent executor rather than an independent, simply because it may mean that the creditors have a harder time obtaining payment. An executor may prefer to be dependent if fights among the heirs of the Estate are anticipated. In those situations, the executor may prefer to have the Court approve each and every action the administrator undertakes so that later disputes among the family members can be resolved through rulings by the Court rather than litigation against the executor.
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