Marriage is a significant life event that typically results in changes to financial responsibilities and legal rights. However, while couples may share mutual assets—such as bank accounts, personal property, or real estate—it is still essential for both spouses to create their own estate plans to ensure appropriate protections are in place for the surviving spouse and any children.
It is important to plan your estate with your significant other in mind—determining beneficiaries, identifying shared and separate assets, creating healthcare directives, and finalizing burial plans. Before you start planning, consult an attorney and research estate distribution laws for married couples in your jurisdiction that may affect your estate plans.
When creating a Last Will and Testament, you will have to name an executor or co-executors to settle your estate and distribute your assets after you pass away. Some couples choose to appoint each other as the executor of their wills. While you can name the same person as a beneficiary and executor in your will, consider naming an alternate executor in case your spouse predeceases you.
Naming guardians for any dependents is critical for couples with minor children. If you or your spouse pass away, custody of minor children remains with the surviving parent. However, to prepare for the possibility of you and your spouse passing away, appoint a legal guardian in your Last Will and Testament. Selecting a guardian or co-guardians for your children requires careful consideration. As a couple, determine the criteria for an ideal caregiver. Review your list of potential candidates and discuss the responsibilities with the person(s) you select. If your preference of minor guardian(s) should change or the individual(s) named can no longer serve, update your Last Will and Testament as soon as possible. Without an updated will, the court will decide who will be appointed guardian of your children.
Determining how your children’s inheritance will be managed is also vital. For example, you can create a testamentary trust that is managed by a trustee or co-trustees until your children reach majority age. Life insurance is yet another estate planning resource that should not be overlooked. A payout from an insurance policy can help families maintain their standard of living despite the loss of the decedent’s income. Life insurance proceeds can also fund a trust or an account to support the long-term needs of a surviving spouse or child(ren).
Depending on your and your spouse’s needs, establishing revocable living trusts is another option your attorney might recommend as part of your estate plan. A revocable living trust allows the trust creator or grantor to place selected assets in trust. Typically, the grantor is named as the primary beneficiary during his or her lifetime and may also act as his or her own trustee. The grantor retains rights over the trust and may change or revoke the trust at any time. At death, a revocable trust designates a successor trustee and outlines distribution of the trust’s assets. Some select this option to avoid a lengthy probate process and protect the privacy of the grantor and beneficiaries of the trust. In the event of the grantor’s incapacity, a revocable trust also dictates who will manage the trust and financial affairs, which could prevent the need for competency hearings and court proceedings to appoint a conservator or guardian of the assets.
In addition to establishing a will, other important documents to consider include power of attorney(s). A healthcare or financial power of attorney can give the individual(s) you select the authority to make healthcare and financial decisions on your behalf in case you become incapacitated. Alternatively, advance directives (e.g., a living will or do-not-resuscitate (DNR)) help guide the specific decisions of doctors and caregivers if you become incapacitated and incapable of expressing your wishes regarding your medical treatment.
It is equally important to talk to your family about the estate plans you establish. Doing so can prevent arguments and disputes among family members after you and your spouse are gone. The conversation does not need to focus solely on money, but on your intent. Discuss distribution of your possessions with your family—if there are specific items you want to go to a certain beneficiary, make sure there is verbal understanding, but also dictate your wishes in writing.
Consult an estate planning professional who can help you develop a strategy for your estate plan that is right for you and your family’s specific circumstances.