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Changes in Your Family? Time to Revisit Your Estate Plan

After you get married, you might decide that you need an estate plan. Actually, an estate plan is important even if you aren’t married. Of course, whenever your circumstances change, you should revisit this plan to make sure it fits your current situation. Remember that an estate plan never should be viewed as if it were etched in stone. With major life changes, you must realize that your estate plan reflects a time that no longer exists, potentially making it more a part of your history than your future. We will focus on a Will that was drafted after you got married, only to be followed by a divorce, then remarriage, and additions (by birth or adoption) to your family after the second marriage.

When you have been divorced, you may receive a property distribution of assets that were acquired during the marriage that has ended. If some of the property is in investment funds or insurance policies or similar financial tools, you can name beneficiaries to receive these after your death. They do not go through the probate process (if you have a Will in place when you die) or estate administration (when you die without a Will). Instead, these go directly to the beneficiaries whom you chose. As a result, if you do not change your beneficiaries after you remarry, these assets are seen as separate from the property that would be in your second marital estate. They pass according to your previous designation of beneficiaries — you need to change your estate plan if you want a different result.

However, there are situations in which Pennsylvania law makes changes in your Will, even if you do nothing. For example, after a divorce, any provision regarding your ex-spouse no longer has legal effect so he or she would no longer be in your Will unless your estate plan incorporates language in your Will that divorce won’t alter that Will. Generally, the property that would have gone to the former spouse under the original Will becomes part of your intestate estate, to be distributed to your heirs as if you died without any Will at all. If you reside in Pennsylvania when you die, then Pennsylvania’s laws of intestate succession determine who receives what portions of this property — effectively, this becomes part of your estate plan since you didn’t revisit and revise it while you could.

Of course, you may remarry at some point, and — once again — the Pennsylvania legislature has made some decisions on your behalf, assuming that you have not changed your initial Will. The new spouse is in a position to receive a spouse’s intestate share that applies to your circumstances (such as whether there are stepchildren, for example).

However, if you revised your estate plan after your remarriage and gave a bigger share to your new spouse than she or he would receive under Pennsylvania intestacy law, then the surviving spouse gets the larger share. Some people have a new Will drafted that, through its language and the circumstances at the time that it was created, was made in contemplation of a marriage that actually taken place at that point. Then, the spouse, once the marriage occurs, would receive the share that your estate plan dictated. There is a potential exception  to this because the surviving spouse under Pennsylvania law can elect against the Will, in which case this person might be able to inherit approximately one third of your estate.

Assuming that your new relationship yields new children, whether by birth or adoption, this can impact on your existing estate plan. For example, unless the Will clearly demonstrates that these kids were omitted from your estate plan intentionally, they should receive their intestate share, as defined by Pennsylvania law, of your remaining estate after the surviving spouse’s share is deducted from the estate. The remaining estate would be equal to the shares that the children would have received if you had died unmarried and had no Will.

This can get quite complicated, obviously. In addition, many people have other things on the agenda when they have an estate plan created. People often seek to limit the so-called death taxes owed to state and federal governments. You could take the chance that your original estate plan is good enough and never give it a second thought. If this is your approach, then the intestacy laws are ready to fill any gaps that may have developed during the changes that have occurred. However, situations and the goals of your estate plan can change over the course of a lifetime. While considering your mortality is not the most enjoyable experience, you can take comfort in knowing that you will have an estate plan that meets the needs of those whom you want to take care of even when you no longer are around to do so.