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problem in the Edwards case: He was substantially more wealthy than
she and had not taken steps that would reduce his children’s share of their mother’s estate – an estimated $1.5 million covered by the will plus unspecified additional assets poured into Elizabeth’s living trust. Since the trust is a private document, it is not clear whether it benefited John.
Still, as this case suggests, whether you are getting hitched or un- hitched, there are situations when estate planning should certainly be a subject of negotiation and a business-like agreement. Macabre as it may sound, inheritances often are covered in prenuptial agreements, especially when there are children from a previous marriage.
Now that spouses can share each other’s $5.43 million exclusion amount – either through lifetime gifts or bequests – some couples may also choose to cover how these amounts will be applied, in prenups or postnups. This will be especially true in remarriages, when one of the couple is wealthy, and the other enters the marriage with an unneeded $5.43 million exclusion – call it a tax dowry. They might agree on an arrangement to combine the two exclu- sion amounts for lifetime gifts (a process called gift-splitting) so that the wealthier spouse can give more to her children tax-free.
Becoming a parent. Whether you’re married, single or cohabitating, and no matter how much you’re worth, if you’re a parent or about to become one, get serious about planning. Most importantly, be sure you name a guardian for your children and provide for them financially in case some- thing happens to you (Chapter 5). If you start a family with your current spouse and have children with a previous one, make sure you update your plan as soon as the new child arrives. Blended families pose special chal- lenges. To head off future problems, some couples provide in the divorce decree for the purchase of life insurance to benefit their child.
Becoming a grandparent. In the flush of a grandchild’s birth, whether it’s your first or you are lucky enough to have many, “revise estate plan” might not be the first item on your to-do list. But when the excitement subsides, there are a few items you should check. Make sure that your will and any trusts that are part of your plan cover this new family member if his or her parents die before you (assuming, of course, that’s your intent). The same goes for assets that pass through beneficiary designations; in this regard, pay special attention to retirement accounts. If there are other ways you would like to help these children and their parents, you’ll find information elsewhere in this book on

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