If you are in your second marriage, you might feel torn between leaving your estate to your current spouse and providing for your children from a previous marriage. In addition, your children might worry that their new stepparent will receive their share of your inheritance, which can cause tension.
Fortunately, there are some unique aspects to creating an estate plan when you have a second wife. Here are some of the terms you might encounter while making your plan.
Qualified Terminal Interest Property
A QTIP is a type of trust that allows you to name your spouse as the life beneficiary of your estate and children from your previous marriage as your final beneficiaries. While this leaves your spouse with unlimited marital deductions, your family will still have estate taxes when your spouse dies.
You can impose as many or as few restrictions on your current spouse’s share of your estate. For example, you can appoint someone else as executor to minimize your spouse’s control over your property. If you choose to set up a trust, you could allow your current spouse to draw an income from it but ban them from spending too much, so there is something left for your children.
This type of trust and restrictions can be beneficial when divvying up your estate. It can guarantee that your spouse and children from a previous marriage receive a portion of your estate. That can help reduce tension between your children and their stepparent. It might also be a good idea if you have children from another relationship and want to leave a portion for them.