7 Estate Planning Mistakes Remarried Couples in Louisiana Make (And How to Fix Them)

These days, remarriage after a spouse’s death or divorce isn’t unusual in the US. Many couples today are in blended families – second marriages for one or both spouses with children from prior relationships, creating stepfamilies. Spouses in blended families often want to take care of their current spouse but also make sure their children from a prior relationship will inherit from them. It seems like a simple enough goal, but problems often arise in execution.

Louisiana’s community property, forced heirship, and usufruct rules mean that estate planning after a second marriage is more complex than during a first, and assumptions about what will happen often cause mistakes that can be costly and stressful for your family. The good news is that these mistakes can often be avoided, or at least minimized, with the right planning.

Common Mistakes Remarried Couples Make in Their Estate Planning

You know you need an estate plan to protect your spouse and children after you’re gone. You have a Will, powers of attorney, and a living will, so your family is all set, right? They may be, but the truth is that many remarried couples fail to consider important issues when they’re making their estate plans. Here are some of the common mistakes that we see – and how to fix them.

1. Leaving everything to your new spouse outright.

You want to provide for your current spouse and your children from a prior relationship. Everyone gets along, and you trust your spouse to abide by your wishes and provide for your children. So, your Will states that you leave everything you own, community and separate property, to your current spouse. But here’s the risk. In this case, there is nothing that legally obligates your spouse to give your children anything. Even if your spouse includes your children in their Will, nothing prevents your spouse from changing their Will in the future to favor a future new spouse, their own children, or anyone else they choose.

Fix: You can provide for your spouse and protect your children’s inheritance at the same time with a trust. Unlike a Will, a trust gives the flexibility that allows you to support your spouse while they’re alive but can also guarantee that the remainder of your assets will go to your children when your spouse passes away.

2. Ignoring forced heirship.

If you prepared your estate plan while living in another state or used an online form Will, it is very likely that your plan doesn't recognize Louisiana’s forced heirship laws. Forced heirship requires that a certain portion of your estate go to your children who are 23 years old or younger or any permanently incapacitated child, regardless of age. If your Will or trust fails to account for your forced heirs, a court may intervene. Want to learn more about forced heirship? Check out our article on Estate Planning in Civil Law Louisiana: How Forced Heirship, Community Property, and Usufruct Affect Inheritance – Aspen Estate Planning, LLC

Fix: Consult with a Louisiana attorney to make sure that your estate plan, whether a Will or a trust, complies with Louisiana law.

3. Misunderstanding how a usufruct over your home works.

If you’ve purchased a home with your current spouse, it’s community property, and when you pass away without a Will or trust, your spouse receives a usufruct (the right to use) over your ½ of the community property interest in the home. Your children become the “naked owners,” meaning they own your ½ interest in the home, subject to your spouse’s right to use it. In this situation, your spouse won’t be able to sell or mortgage the property without your children’s consent, and in limited situations, the naked owners can demand security, like a bond, to protect their interest. Also, your surviving spouse’s usufruct over your ½ interest in the home will automatically end when your spouse remarries or dies, but regardless, your surviving spouse still owns their ½ interest in the home outright. At that point, there are multiple owners of the home who might have different interests and different plans for the home.

Fix: If you don’t want remarriage to end the usufruct or if you want to make sure security is never required, you can say so in your Will or trust.

4. Commingling separate property.

You owned a house before you married your current spouse. You inherited property from your parents’ estate. You received a gift from a dear friend. This is all your separate property, but if you commingle it with your community property (property acquired after you married), then this may change the character of the property from separate to community property. For example, if you sell the house you owned before you married, and you put the proceeds of that sale towards the purchase of a new house that you bought with your new spouse after you married, you may have turned those separate funds into community property. If you haven’t read our companion post, Community Property vs. Separate Property: Why Is It So Important for Your Louisiana Estate Plan? – Aspen Estate Planning, LLC, it’s worth a few minutes to learn more.

Fix: Don't commingle separate property. If you have a separate property agreement, make sure that you keep clear records about what is separate vs. community property, and ensure that any titles to property are correct.

5. Outdated beneficiary designations

Beneficiary designations on retirement accounts, life insurance, or bank accounts are only as good as the designations themselves. If you completed the designations years ago and have an ex-spouse listed, the designation doesn’t become invalid because you divorced, and the beneficiary designation will control who inherits, no matter what your Will says.

Fix: Review every account that you own that has a beneficiary designation. Make sure that the designated beneficiary is who you’d want to inherit, and if it’s not who you’d want, change the designation. Make a plan to review your designations every few years or after big life events, like marriage, divorce, or the birth of a child.

6. Naming your new spouse in every fiduciary role.

Your estate plan will name an executor for your Will, a trustee for your trust (if you have one), an agent for your financial and healthcare powers of attorney (called mandates in Louisiana). If you put your current spouse in all those roles, will your children object? When you’re gone, will they cooperate with your spouse to close your estate, or will there be disputes about every decision your spouse makes as executor or trustee?

Fix: Consider choosing an executor or trustee who will be able to get along with all your loved ones, such as a close friend, or choose a neutral co-executor or co-trustee to work with your spouse. In situations where you can’t decide on a family or friend to be executor or trustee, you can consider an independent, professional fiduciary.

7. Failing to discuss with your children what your estate plan looks like.

Many people execute a Will or trust, but they never talk to their children and other heirs about it – who inherits what, why you decided to handle it that way, and what are any restrictions you put on trust funds. Your children may make assumptions about what they’ll inherit, and if their assumptions are wrong, then they’re more likely to be dissatisfied and contest your plan in court. This type of situation results in many contested Louisiana succession cases.

Fix: Talk to your spouse and children, or other heirs, and explain what you’ve decided and why. Knowing what’s coming doesn't guarantee that no one will contest things in court, but it can make it less likely. If you don’t want to have a conversation, consider signing a letter of intent explaining your decisions. Although not a legal part of your Will or trust, a letter of intent can help ease hard feelings.

The Blended Family Checklist

If you’ve remarried, estate planning is vital to protect and provide for all your loved ones, and this checklist are some of the easiest action items for you to take care of today. Then, after you’ve checked everything off this list, consult with an estate planning attorney to make sure that your plan fits your family’s unique circumstances.

1. Review your beneficiary designations. Life insurance, 401(k) accounts, IRA accounts, checking and savings accounts – all will pass to the person or people you’ve designated. Make sure they're up to date.
2. Consider whether your home is community or separate property. Did you purchase it before you were married or during your marriage? Did you use any separate funds to purchase the property, pay for the mortgage, or renovate it? If your separate funds were used to purchase, pay, or renovate the marital home, then you may have commingled separate and community property.
3. Write a list of you and your spouse’s separate and community property. This is useful and may help prevent disputes after you’re gone. Remember - inheritances, pre-marriage retirement funds, gifts, lawsuit proceeds, and anything that you acquired before you married is your separate property unless you commingle it with community property.
4. Check whether your separate property agreement was recorded. If you have a separate property agreement, check whether it was recorded in the parish records. If it wasn’t recorded, it may not bind third parties, like creditors.
5. Review your current Will. If you already have a Will, review its terms. Don’t assume that it still accomplishes what you’d want now. While you’re at it, review any existing powers of attorney to make sure your agent(s) are also current.
6. Consider who you would trust to play referee between your spouse and children. If your current spouse and children were to get into a dispute over your estate, who would they all listen to and be able to keep everyone calm? If you don’t know or your answer is “no one,” then you may want to consider naming an independent, neutral third party as executor or trustee.

Where to go from Here

If you prepared your estate plan before you remarried, there's a good chance that it won’t accomplish your goals now that you’ve remarried. And if you don’t have an estate plan, your family is even more at risk of disputes when you pass away. A unique estate plan drafted by a Louisiana estate planning attorney is the answer.

This is where we help. The attorneys at Aspen Estate Planning help blended families consider their risks and design a personalized plan to help avoid those risks and secure your legacy. Call or contact us today for a free 30-minute consultation – 504-284-8910 or aspenestateplanning.com.