Category Archives: Divorce & Family Law

Second marriages: what if your spouse requires expensive long term care?

By Sally Wagley, Maine elder law and estate attorney

We have had a number of clients, either divorced or widowed, become happily married later in life. Sadly, after a number of years of love and companionship, one of them may start to decline and need expensive care in a nursing home or assisted living facility. For purposes of discussion, we’ll assume that the husband is the one who needs institutional care, with the wife remaining at home. The wife may find out to her chagrine that she is expected to use her own assets — accumulated by her before the marriage from a lifetime of work –on her husband’s nursing home costs. She may find out that after he has depleted his own funds, he will not qualify for state assistance through Maine’s Medicaid program (called MaineCare) until she has spent down her own funds to a certain point. This causes her great anxiety, for two reasons: most important, she wants to make sure that she has enough to live comfortably for the rest of her life; in addition, she may want to be able to pass on assets to her own children.

What can a couple do in this situation? Advance planning, while both are still healthy, is the best option. If they qualify for and can afford long term care insurance, that will make it less likely that the wife will have to spend down her own savings. Another option is an irrevocable trust, whereby the wife places some of her own assets into an irrevocable trust, naming one or more of her children as trustees. She gives up control of the principal in the trust but will receive income from it. In this way, she can put some of her assets off limits for purposes of her husband’s possible future long term care expenses. In order for her to safely do this, however, she must feel reasonably confident that neither she nor her husband will need long term care in the next five years, as MaineCare has a “five-year look-back” rule which penalizes people who transfer assets in order to qualify for MaineCare.

For a couple who is already in crisis, there are still options. The spouse may purchase a certain type of annuity which meets the requirements of the law. This annuity will protect her assets while providing a stream of income. She can invest her countable assets into exempt assets, such as repairs or improvements to her home, or the purchase of a newer car.

As a last resort, some spouses choose to divorce for the purpose of preserving assets. This is a wrenching decision for most clients, but may be the only option for ensuring that the spouse at home to preserve what she has worked so hard for over the years. This divorce, however, will not prevent the wife from continuing to provide love, companionship and care to her husband, just as if they continued to be married.

Second marriages: providing for a surviving spouse in a trust

By Sally Wagley, Maine elder law and estate attorney

We have had a number of clients who fit the following profile: They are married for a second time, each with children from a previous marriage. One of them has substantially more than the other. Let’s assume for discussion purposes that the husband is the one with more than the wife. The husband wants to ensure that, should he die first, the wife has enough income to live comfortably for the rest of her life. However, he does not want to leave assets to her outright, as he wants to make sure that his children will ultimately inherit.

One option is for the husband to leave some or all of his estate to a trust for his wife’s benefit. Such a trust typically provides that she gets all the income generated by the assets placed in trust, to give her a stream of income which is adequate to maintain her standard of living. The trust may provide, in addition, that should the trust income and her own income be inadequate, the wife can receive amounts of principal which are needed for this purpose.

Who should be the trustee of this trust? One option is for the husband to name one or more of his children as trustees. If his estate is substantial, it is possible to have a bank serve as trustee. Or, if the husband trusts the wife to be a responsible trustee and to abide by the rules of the trust, he can name her to be the trustee, with one or more of his children to become the successor trustee if she becomes incapacitated.

This arrangement may be coupled with giving the wife a life estate in any real estate which he owns separately, such as a primary home or a cottage.

Second marriages: pre-nuptial and post-nuptial agreements

By Sally Wagley, Maine elder law and estate attorney

Some clients who marry later in life do not think, before the wedding, about the usefulness of a prenuptial agreement. In the flush of romance, these clients may not have their minds on practical matters, such as ensuring that their assets will remain separate should they divorce and ensuring that children from previous marriages will inherit.

After the wedding, when things calm down, these clients may turn their attention to these sobering issues. They may, at that point, wish they had executed a prenuptial agreement. Is it too late for these clients to execute an agreement of this kind?

No, it is not too late for these clients. Post-nuptial agreements under which each member of the couple agrees to forego certain spousal rights in the event of divorce or upon death. In this situation, each one will need to see advice from his/her own lawyer, as a single lawyer would face a conflict of interest in representing them both. Also, each one has to make full disclosure to the other of all financial assets that each has, so that there are no secrets between them in this regard.

Second marriages: the “elective share,” your spouse’s right to part of your estate when you die.

The law in Maine is such that, absent an agreement to the contrary, a married person cannot disinherit his or her surviving spouse. The law gives the surviving spouse the right to go to court to demand that he or she receive at least one-third of the deceased’s “augmented estate.” The determination of the amount that the surviving spouse can receive takes into account not only the assets in the deceased spouse’s name but also some of the surviving spouse’s assets.

We have many clients who marry later in life, sometimes for the second time. Each spouse has accumulated assets separately and may have children from a previous marriage. One or both spouses may wish to favor his or her own children in the will, choosing not to leave anything to the surviving spouse or perhaps to leave only a modest amount. For those clients who die without being aware or without addressing the “elective share” issue, the deceased’s children may be in for an unpleasant surprise, should the surviving spouse choose to seek more from the estate than what was left to him or her in the deceased’s will.

Clients who are either planning to marry or who are already married, who wish to agree that neither will file for the elective share against the other’s estate can put this in writing in a prenuptial or postnuptial agreement.

Second marriages: giving your surviving spouse a life estate in your home

By Sally Wagley, Maine elder law and estate attorney

Consider the case of this typical client of ours, a man in his 60′s, married for the second time to a lovely woman, also in her 60′s. He has three grown children from his previous marriage and several grandchildren. She too has children and grandchildren of her own. Both have property, savings and investments of their own, which they wish to keep separate, and which they wish to leave directly to their own children rather than to each other.

When they marry, the wife moves into the husband’s home. The husband chooses to keep the home titled in his own name, rather than put his wife’s name on the deed, so that the home will ultimately go to his children when he dies. At the same time, he does not want his wife to have to move out of the home when he dies. He comes to us for advice.

One of the options we offer him is revising his will so as to provide his wife with a “life estate” in the home. The will we prepare for him states that should his wife survive him, she has the right to occupy the home for as long as she wants, provided she pays the expenses (taxes, insurance, utilities, maintenance) and takes care of the home. Should she choose to move out of the home, the property will then belong to his children, who can do with it as they choose. If she remains there until she dies, then upon her death the husband’s children will at that point receive title to the home.

In this way, the husband can ensure that his wife will not be uprooted while at the same time ensuring that his children will inherit the property when she no longer needs it.

Legal Issues Facing People in Second Marriages

By Sally Wagley, Maine elder law and estate attorney

In the next couple of weeks, we will be blogging on some of the legal issues facing older people who are in second marriages. As Maine elder law and estate planning attorneys, we have many clients in this situation. Many of them have children from previous marriages and want to balance the needs of those children with the needs of a surviving spouse.

Some of the legal vehicles for ensuring this balance are: prenuptial and postnuptial agreements; leaving the surviving spouse a life estate in the home; marital and family trusts; a special needs trust for a spouse who is likely to need expensive long term care.

We hope you will find this information useful and we will be glad to advise you if you are in a second marriage.

Marrying Later in Life: Should You Have a Prenuptial Agreement?

by Michael J. Levey, Esq.

When a marriage occurs later in life, each partner has his or her own lifelong experience.  Each has a substantial personal, family and economic history.  In addition, each party has separate assets and liabilities, developed separately from the new marital partner. And quite importantly, each partner has a family constellation (children, grandchildren and others) separate from the new marital partner.

When thinking of marrying, the partners inevitably consider the impact the new marriage will have on their separately developed economic and personal lives.  The questions which arise are:

  • If my new marriage ends in divorce, how can I protect my separately developed assets?
  • If my new marriage ends in divorce, will I be entitled to support, or will I have to pay support?
  • If I remarry, how can I ensure that upon my death, my separate assets will go to my own, original family?
  • If I make an agreement with my new partner about these subjects, will that agreement “hold up in court”? 

Maine law, in the Uniform Premarital Agreement Act, provides answers to these questions.  The Act permits parties to have an agreement which is made in contemplation of the marriage.  Under the act, the agreement must be made before the marriage and then takes effect when the couple is married.  The agreement must be in writing and signed by the parties.  The agreement can be modified or terminated during the marriage if both parties agree.

If my new marriage ends in divorce, how can I protect my separate assets?  The Act permits a prenuptial agreement to contain the following kinds of provisions, giving a party the opportunity to protect that party’s separate assets:

  • The agreement can state that the separate real estate, accounts or retirement assets of a party are to remain the separate property of its owner, and that additions to and increases in value to any such property remain the separate property of its owner.
  • The agreement can give a party the exclusive right to manage, re-invest and otherwise completely control that party’s separate assets.
  • The agreement can allow a party to keep that party’s separate assets in the event of divorce.

 If my new marriage ends in divorce, will I be entitled to support, or will I have to pay support?  A prenuptial agreement can state that upon divorce neither party will pay support to the other.  The agreement can also set forth a specific amount of spousal support. The agreement can state that spousal support will be terminated later, for example upon remarriage of the spousal support payee.

If I remarry, how can I ensure that upon my death, my separate assets will go to my own, original family? The prenuptial agreement can give a party the opportunity to pass his or her separate assets to that spouse’s original family or other loved ones upon death. A premarital agreement can prevent a surviving spouse from demanding a one-third “elective share” amount from the deceased spouse’s estate and from exercising other rights otherwise available under the law. The agreement can state that the surviving spouse is to receive a certain limited amount, and can require one or both spouses to have wills providing for this specific amount.

If I make an agreement with my new partner about these subject matters, will that agreement “hold up in court”?  The Act upholds these agreements, if they are made in the correct fashion (made in contemplation of marriage, executed before the marriage, written and signed).  However, the court will not enforce the agreement if it was not executed voluntarily by the parties.  The court will not enforce the agreement if it was an “unconscionable” agreement and the victimized party was kept in the dark about the assets of the other party.  The following suggestions help keep premarital agreements enforceable:

  • Full financial disclosure:  Before signing the agreement, the parties should make an accurate and complete disclosure to each other of their separate assets, liabilities and income. 
  • Separate lawyers for each spouse: Before signing the agreement, each party should have access to separate and independent legal advice.  

Does every person who is thinking of marrying later in life need a premarital agreement?  Does every person have to keep his or her assets separate from a new spouse? 

          Of course not.  The law doesn’t require premarital agreements, but only permits them.  Every person and every marriage is unique. Some couples, for very good reason, want to blend their assets during their new marriage and to permit flexibility as to what happens in the event of divorce or death.  I have clients who, after reviewing the relevant facts, have written premarital agreements, and I have had other clients who have chosen not to write them.  The important point is that people marrying later in life ought to give careful attention to the above considerations, so that they can choose the legal option which best fits their situation. 

The information provided here is for educational purposes only, and should not be construed as legal advice or an answer to a specific legal problem.

 Michael J. Levey practices family law with the firm of Levey and Wagley, P.A. in Winthrop, Maine. Go to www.leveyandwagley.com.