Estate Planning for Second Marriage

There's Love, and then there's the Law

People remarrying for the second (or third, etc.) time in Florida without a Prenuptial Agreement may be allowing the State of Florida to make some, most, or perhaps all of their estate planning decisions for them. A vestige of England’s common law designed to protect spouses and families, Florida’s laws vest surviving spouses with several rights in the first-spouse-to-die’s estate, including Homestead rights, exempt property rights, elective share rights and family allowance.

One of the most complicated assets in Florida’s estate planning for families is the Florida Homestead. In general, if a married Florida resident dies owning a home in Florida, the only person the deceased resident can leave the home to is his or her spouse. Any attempt to leave the home to someone other than the spouse will result in the spouse receiving a “life estate” in the home and a “remainder interest” passing to the deceased spouse’s lineal descendants (children or grandchildren). Minor children complicate the issue further, eliminating the ability of the deceased spouse to leave the Homestead outright to the spouse.

While joint ownership (with a right of survivorship) eliminates many of the problems relating to Homestead at the death of the first spouse, many of our more “mature” second marriages (children already grown) are more interested in passing assets to each spouse’s own children, rather than providing for the surviving second-marriage spouse. In fact, many second marriage spouses indicate no interest in receiving anything from their spouse. Florida law, however, provides spouses with these rights irrespective of the intent of the parties. Further, some of the “elective” decisions may be made by someone other than the surviving spouse (i.e. a child acting as power of attorney or guardian for the surviving spouse may file such an election).

In addition to the Homestead issue, surviving spouses may be entitled to exempt property (including automobiles and household furnishings up to $10,000), a family allowance (up to $18,000) and a 30% “elective share” of their spouse’s estate. The elective share is a right to receive 30% of the deceased spouse’s estate (in addition to the Homestead, family allowance and exempt property rights). The 30% share applies to probate assets, jointly owned property, trust assets, life insurance, retirement benefits, and various other transfers with retained rights – and applies regardless of what the deceased spouse’s will, trust or beneficiary designations provide.

For spouses of second marriages who wish to keep their assets segregated for their own families, a “prenuptial agreement” entered into before marriage may be sufficient to waive these various rights. Similarly, spouses may enter into a “postnuptial agreement” after marriage (although failure of a spouse to agree after marriage may limit your options to divorce or divestiture). Both of these agreements have various requirements and complexities. However, both may act to protect each spouse’s rights to direct disposition of each spouse’s assets to their own families rather than defaulting to the allocations provided under Florida Law.