Estate Planning For Married Couples
Reasons For Estate Planning For Married Couples
Estate Planning for married couples involves planning for any legal, financial, and medical matters that are likely to arise upon your death or incapacity. Some of the reasons why it is important to have an Estate Plan include…
- It Protects Your Family and Beneficiaries. By preserving the value of your assets, Estate Planning protects your family and Beneficiaries by ensuring they are provided for financially. Additionally, if you have the right documents in place, Estate Planning can protect your family from having to go through the long and expensive Probate Court process just to receive your assets.
- It Gives You Control Over who Receives Your Assets. Estate Planning lets you name Beneficiaries that will inherit your assets after you pass away. It also allows you to appoint a Successor Trustee or Personal Representative who will carry out your wishes after your death and ensure that your Beneficiaries receive the assets you want them to have. Your Estate Plan lets you decide how your legacy will be passed on to the people you care about the most.
- It Allows You to Choose Who Will Make Important Medical and Financial Decisions for you. Through the use of a Medical Power of Attorney and Financial Power of Attorney, Estate Planning allows you to choose people who will make crucial medical, financial, and legal decisions on your behalf should you become incapacitated and unable to do so yourself.
- It Protects Minor Childrens. By appointing Guardians and conservators for your children, an Estate Plan ensures your kids will be taken care of according to your wishes in case of your death. Estate Planning allows you to choose the person you know will have your children’s best interest at heart and care for them as their own. Essentially, it allows you – not the court – to decide who will raise your children.
- It Can Reduce The Tax Burden for Your Family and Beneficiaries. Proper Estate Planning allows you to minimize the impact of death taxes on the value of your estate after you pass away.
- It Reduces the likelihood of Family Disputes. By having an Estate Plan, you can reduce the likelihood that your family will fight over your estate after your death. Essentially, a clearly thought out and documented Estate Plan can make your wishes clear to your family so they don’t fight with each other over your assets.
You can always review the plan as the years go by, but worrying about change should not deter you from creating your Estate Plan as soon as possible.
Marriage will not only come with new responsibilities, it will also create new Estate Planning considerations as your financial and legal status changes. Proper Estate Planning for married couples also allows you to give your spouse the legal authority to make critical decisions for on your behalf if you cannot do so for yourself.
What Is An Estate Plan?
An Estate Plan is a collection of legal documents outlining how you want your estate distributed when you die. Additionally, an Estate Plan consists of instructions on how you want your financial and medical decisions handled if you cannot do so yourself. Mostly, an Estate Plan consists of the following essential documents:
- Will or Living Trust: A Will or a Living Trust is the foundation of a good Estate Plan. In general, they dictate how your assets should be divided after your death. While a Will and Trust are similar, there is an important difference you should be aware of – a Will does not avoid Probate Court. Probate Court is a long and expensive process that your family will have to go through after your death in order to receive your assets. This process can take anywhere from 6 months to 2 years. This can be a difficult situation for your family during a time of mourning. Luckily, there is a proven solution to avoid this scenario. A Living Trust functions similarly to a Will, however it provides more robust protection and allows your family to avoid Probate Court. Instead of waiting months or years to receive your assets, your family can receive your assets privately in a matter of days or weeks after your death. In general, if you own a home or have children, a Living Trust is the best option to create as the foundation of your Estate Plan.
- Medical Power of Attorney: This document appoints someone known as your Patient Advocate to make healthcare and medical decisions for you if you are incapacitated and can no longer do so yourself. If you don’t select a Patient Advocate in advance, your family may be forced to petition the Probate Court for a Guardianship to make decisions for you. This is less than ideal in a crisis situation.
- Durable Power of Attorney: This document appoints someone you trust to handle financial matters on your behalf if you are no longer able to do so. The person you appoint is known as your Agent. If you don’t select an Agent, your family may be forced to petition the Probate Court for a Conservatorship to handle your finances, so it’s best to properly appoint one in advance.
- Living Will. This document outlines your end-of-life healthcare wishes, including pain relief and resuscitation. Think of this as the medical instructions for your Patient Advocate to follow.
Estate Planning With Your Spouse
If you are married, it is really important that you create an Estate Plan together so that you are on the same page with respect to what should happen in the event of the death or incapacity of one or both spouses. Spouses should discuss individual end-of-life wishes and their individual and shared goals. Some Estate Planning decisions that should be made together, include…
- End-of-life medical and financial considerations
- Guardianships dictating who will take care of your minor children
- How much of your estate each Beneficiary should receive
- Planning considerations for children with special needs
- Whether you want your children to avoid probate to ease the transfer after death
Appointing A Guardian For Your Children
One of the most important tasks when Estate Planning for married couples is naming a Guardian for minor children. As a married couple with minor children, you should consider appointing a Guardian to raise your children if you are no longer able to do so. Otherwise, the court will decide who will take care of your children.
If one of you dies, the surviving parent automatically becomes the sole Guardian. However, if both of you die simultaneously, another person will raise your children. To ensure your children are well cared for, you need to appoint a person you trust as their Guardian.
By allowing you to name a Guardian, Estate Planning gives you control over how your children should be raised if you and your spouse were to die unexpectedly. It allows you to keep your children together by naming one Guardian or Co-Guardians for them. It also allows you to select an alternate Guardian should your first choice be unable to take up the role.
Before choosing a Guardian, you and your spouse should discuss the qualities you want the Guardian to have. Before settling on an individual as your children’s legal Guardian, you and your spouse need to ask yourselves the following questions:
- Is the person caring, patient, and dependable?
- Can you trust them to raise your children according to your wishes?
- Do they share your spiritual/religious beliefs?
- Do they have a relationship with your children? Essentially, would your children be comfortable living with them?
- Does the person have children of their own? And if yes, would they be able to care for another child/children?
Once you and your spouse have chosen a Guardian, you should inform them of your decisions and what Guardianship entails. You should have an open and honest discussion with your chosen candidate. Some of the issues that you should discuss with the designated Guardian include financial support and any other special instructions on how your children should be raised in your absence.
If you and your spouse do not have any minor or dependent children, then Guardianship may not be necessary.
Transferring Property Without Probate
As part of Estate Planning for married couples, you may want to avoid Probate Court so that your assets can pass quickly and seamlessly to your Beneficiaries after you pass away. The benefits of transferring property outside of Probate Court include:
- Keep the transfer of your assets private instead of in a public court setting
- Reduce the expense of the transfer by avoiding court costs and attorney fees
- Ensure that your assets are distributed quickly according to your wishes
- Minimize the likelihood of jealous relatives contesting your wishes
Healthcare Planning When Estate Planning For Married Couples
Outlining your medical or health care preferences is also very important when Estate Planning for married couples. Essentially, you should discuss and document your medical preferences with your spouse, including your end-of-life medical wishes.
Some of the common medical preferences that you might include in your Living Will include:
• Your views on artificial life support
• Your views on pain relief and resuscitation
• Your views on blood transfusion and organ donation
• Your desired quality of life and other end-of-life medical wishes
Discussing and documenting your medical wishes prior to a medical emergency is very important because it can help ensure that your family will be able to act quickly on your behalf in a time of crisis. Additionally, it can help reduce the guilt that your family may face when having to make a life-or-death decision on your behalf.
Storing Your Estate Planning Documents
After you and your spouse have each completed all the relevant Estate Planning documents, including your Will or Trust, Medical and Financial Powers of Attorney, and Living Will, you need to keep them in a safe place. Additionally, you should make sure that your Successor Trustee or Personal Representative knows where to find a copy because they will be the individual responsible for settling your estate.
Updating Your Estate Plans
You will need to review and update your Estate Planning documents as time goes on, especially after major life events. Some of the major life events that might require you to update your Estate Plan include:
- Marriage, separation, or divorce
- Birth or adoption of a child
- Death of a Beneficiary
- Death of a Guardian
- The death or incapacitation of your Successor Trustee or Personal Representative
- Birth of a grandchild
- Acquiring significant assets or the accumulation of significant debts
Estate Planning Documents For Married Couples Conclusion
Estate Planning for married couples is incredibly important and it takes time and thoughtful consideration. By starting now to develop a plan for your loved ones upon your death, you can help them avoid unnecessary hurdles and heartaches that can take place after you die. An Estate Plan also guarantees that an individual you trust can make decisions for you when you pass away or if you become incapacitated.
To learn more about how to create an Estate Plan, we’d encourage you to read this short article we wrote that outlines how to Estate Plan in 10 simple steps.
Or, if you know that you need an Estate Plan, we’d like to offer you a free consultation with one of your experienced Estate Planning Attorneys. Over the past decade, we’ve helped 1,000s of families develop their Estate Plans.
Just give us a call at (248) 613-0007 to book your free consultation today!