America’s baby boomers -- the 76 million born between 1946 and 1964 -- include many believers in second chances. Hence there are numerous second marriages within this population group. And after marrying, many couples wish to buy a property together.
But for boomers with grown children, personal finance experts caution that a failure to plan ahead can lead to future problems after one spouse dies.
“Couples in blended families want to protect the interests of their own grown kids. But if you don’t have a will or a trust in place, the courts will decide what happens to your stake in the house, and that can get really messy,” says Eric Tyson, co-author of “Personal Finance After 50 for Dummies.”
He strongly recommends that couples in second marriages consult an estate planning attorney before buying a place together.
“Contrary to popular belief, estate planning isn’t just for the rich. Even those with limited assets need to think through what they’ll want to happen to those assets after they pass away,” Tyson says.
How can you find a knowledgeable estate attorney to help formulate your plans? Tyson recommends you go to the website of the American College of Trust and Estate Counsel (actec.org), an organization of lawyers who specialize in estate planning.
Before you buy a property with your second spouse, he says it’s wise to discuss your intentions on how equity in that home will be divided upon your death.
Denis Clifford, an attorney specializing in estate planning, says the key is to ensure that your wishes are carried out in accord with state law.
“After you die, you don’t want your children to miss getting the equity from the house because of a poor plan. By the same token, you also wouldn’t want your spouse thrown out on the street due to a bad plan,” says Clifford, the author of “Plan Your Estate.”
Although a relatively simple will is sufficient for many couples, he says those with children from a previous marriage may wish to establish a “living trust” to help ensure their estate is settled smoothly and fairly after they die.
Here are a few pointers:
-- Make sure the legal advice you obtain is expert.
Jordan Simon, the co-author of “Estate Planning for Dummies,” is an investment manager, not a lawyer. But he strongly advises people who want an estate plan to hire an attorney to help ensure they get solid advice.
“Trying to create your own plan makes doing your own taxes seem like a walk in the park,” Simon says.
Although several books and websites encourage consumers to create their own wills and trusts, Simon says those who do so risk making mistakes their survivors could live to regret.
Charles Abell, an estate planning attorney affiliated with the American College of Trust and Estate Counsel, says there’s no such thing as a “one size fits all” estate plan -- even for moderate- to middle-income people. Because the laws governing probate differ from state to state, he says it’s critical you choose an attorney licensed to practice in your state.
-- Rely on personal recommendations in your search for a suitable lawyer.
Obviously, anyone can find an attorney through a professional lawyers’ organization, such as a local bar association. But you’re usually better off asking for recommendations from friends, relatives or professional contacts -- such as your accountant, according to Patricia Annino, an attorney in the field.
“The best way to find a good lawyer is by word of mouth,” says Annino, author of “It’s More Than Money: Protect Your Legacy.”
Tyson cautions consumers against choosing an estate planning specialist based solely on advertising. He also urges people to avoid picking a lawyer who offers them a free dinner to participate in an estate planning seminar.
“Although they don’t say so, many times these lawyers are really trying to sell you high-priced annuities or insurance products,” Tyson says.
-- Educate yourself in advance of hiring a lawyer.
Are you and your spouse scrimping to save for a place to house your blended family? If so, you’re likely fearful that going to an estate lawyer could cost you a significant sum.
But Tyson says there are several ways to limit your legal fees and still get a quality estate plan that will safeguard your intentions relative to the inheritance of your assets. One way is to find a lawyer who will give you a firm, up-front estimate on the cost of doing your plan. Another is to educate yourself on estate planning basics before your first visit with the attorney.
“I suggest you buy a good book or two on the topic. That way you will at least become familiar with some of the basic jargon and concepts used in the field,” Tyson says.
-- Don’t delay on the need for estate planning.
Annino says a surprising number of people get all the right estate documents drawn up and then refuse to sign them.
“Some folks have a superstitious feeling that once they sign the documents, they’ll die soon after,” she says.
But Annino urges people to avoid letting anxieties block their progress toward creation of a watertight estate plan.
“Don’t let your fears about your mortality keep you from completing this important step,” she says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)