Generally speaking, the first $60,000 (previously $30,000) of a probate estate may be claimed by the surviving spouse. A legitimate prenuptial or postnuptial agreement may waive the right to receive the Spousal Allowance.
Understanding Spousal Rights in Second Marriages
In the intricate landscape of second marriages, inheritance rights and asset distribution can become a complex and sensitive subject. Understanding what a second wife is entitled to in terms of inheritance can help ensure clarity, fairness, and peace of mind for all parties involved.
Spousal Allowance and Elective Share: Key Considerations
- Spousal Allowance: In North Carolina, a surviving spouse is generally entitled to claim the first $60,000 of a probate estate. This right can be waived through a valid prenuptial or postnuptial agreement.
- Elective Share: Most states, including North Carolina, have Elective Share statutes. These statutes describe a minimum portion of a deceased spouse’s estate that a surviving spouse can claim, even if the deceased spouse’s will disinherited them or left them a smaller amount. The Elective Share amount is based on the length of the marriage:
- 15% if the couple was married for less than 5 years
- 25% if the couple was married for more than 5 but less than 10 years
- 33% if the couple was married for more than 10 but less than 15 years
- 50% if the couple was married for 15 years or older
Calculating the Surviving Spouse’s Share
The court will consider the following factors when determining the surviving spouse’s share:
- Total Net Assets: This includes assets owned by the deceased at the time of death, property in revocable living trusts, death benefits, and retirement accounts.
- Net Property Passing to the Surviving Spouse: This includes property received outright or in trust, spousal allowance, and assets from life insurance or retirement plans.
Protecting Assets in Second Marriages: The Role of Trusts
In second marriages, where couples often have separate assets and children from previous relationships, trusts can be a valuable tool for asset protection and inheritance planning. By incorporating a trust for the surviving spouse, the remaining assets can revert back to the intended beneficiaries (usually the children of the first spouse to die) upon the surviving spouse’s death.
Seeking Professional Guidance: Essential for Navigating Second Marriage Inheritance
Estate planning in second marriages requires careful consideration and expertise. Consulting with an experienced estate planning attorney can help ensure that your wishes are clearly documented, your assets are protected, and your loved ones are provided for according to your intentions.
Additional Considerations for Second Marriage Inheritance
- Updating Estate Plans: It’s crucial to update your will and trust after each marriage to reflect your current circumstances and beneficiaries.
- Prenuptial Agreements: These agreements can outline how assets will be divided in the event of divorce or death, offering additional clarity and protection.
- Beneficiary Designations: Ensure that beneficiaries on investments and life insurance are up-to-date and reflect your current wishes.
- Long-Term Care Considerations: Understand the potential financial implications of long-term care needs and how they might impact inheritance.
By proactively addressing inheritance issues and seeking professional guidance, individuals in second marriages can create a plan that ensures their assets are distributed according to their wishes, protecting their loved ones and providing peace of mind for the future.
Surviving Spouse Elective Share
North Carolina is one of the majority of states that have what are known as Elective Share statutes. If a deceased spouse’s Last Will and Testament disinherited the surviving spouse or left the surviving spouse with less than what the surviving spouse is entitled to under the Elective Share statutes, the surviving spouse may petition the court for a minimum portion of the deceased spouse’s estate.
If you have a valid prenuptial or postnuptial agreement that waives rights to any Elective Share amount, your surviving spouse may petition the court to claim the Elective Share amount after your death, even though you can execute a Last Will and Testament that disinherits your spouse. It’s called an elective share because it’s not a mandatory share. After the death, the surviving spouse has six months to choose to appear in court and request the Elective Share amount.
North Carolina modified its elective share regulations in 2013, basing them on the duration of the marriage. As a result, the elective share amount in North Carolina is as follows:
- 15% if the couple had been married for less than five years;
- 25% if the couple had been married for longer than five years but less than ten years;
- 33% of the couple if they were married for longer than 2010 but less than 2015 years; and
- 50% if the pair had been married for at least five years.
The amount of property that passes to the surviving spouse through both the right of survivorship (a shared home, shared bank accounts, etc.) under the elective share laws In the event that their elective share is greater than their allotment in the Will, the surviving spouse may petition the court to be reimbursed for the difference. Sue can ask the court for the extra $30,000 if, for instance, her elective share is worth $80,000 and she was only left $50,000 in her husband’s will.
When, therefore, might the Elective Share statute be required? Take into consideration a well-known case involving the creator of the Hooters franchise, Mr. Brooks, and the Elective Share statute. When Mr. After Brooks passed away, his vast estate was divided as follows: 2030 percent went to each of his two children, 2010 percent went to Clemson University, and the remaining 2030 percent went to various family members. For twenty years, he gave $1 million annually to his second wife, Tami. Tami turned down that offer and instead petitioned the court for a third of Mr. Brooks’ estate. Mr. Tami’s claim was unsuccessfully contested by Brooks’ son because Elective Share statutes have been ruled to be constitutional on multiple occasions.
Calculating the Surviving Spouse’s Share
The court will also compute the “Net Property Passing to the Surviving Spouse” to ascertain what the surviving spouse has already received and whether the surviving spouse is entitled to any additional assets in addition to deciding whether the surviving spouse is entitled to claim an Elective Share.
The “Property Passing to the Surviving Spouse” less any death taxes or claims paid from the Property Passing to the Surviving Spouse is what is known as the “Net Property Passing to the Surviving Spouse.”
The term “Property Passing to the Surviving Spouse” refers to almost everything that comes into the hands of the surviving spouse, whether it be assets from the estate, any spousal allowance received, or assets from any trust that have been designated as beneficiaries, such as proceeds from life insurance or retirement plans.
The Second Wives Guide
FAQ
What is the rule for second wife?
What does the second wife inherit?
How is money split in a second marriage?
What happens if you have a second marriage?
In a second (or third or subsequent) marriage, a spouse may feel torn between the needs of their current spouse and the needs of children from an earlier marriage. These children may worry that the parent’s current spouse will exhaust their inheritance, especially if your spouse does not have a good relationship with their stepchildren.
Can a second spouse claim a IRA?
Your second spouse typically will be able to claim one-third to one-half of the assets covered by your will, even if it says something else. Joint bank or brokerage accounts held with a child will go to that child. Your IRA will go to whomever you’ve named on the IRA’s beneficiary form, leaving your new spouse out.
Do I need life insurance if I have a second marriage?
Also, consider whether you have sufficient life insurance coverage to provide for the surviving spouse and any children associated with the marriage. Both spouses in a second marriage may need to have life insurance coverage, particularly if one person is the primary breadwinner while the other is the primary caregiver for children.
What should I do if I have a second marriage?
It is definitely advisable to make sure you both have life insurance policies that cater to your spouse and any children, along with a funeral plan to cover any expenses. Apart from your children, you should also be clear about second marriage inheritance issues with your to-be spouse.