If you are a newlywed or are about to be married, estate planning is most likely not a top priority now. Dealing with topics such as your potential incapacity and eventual death is probably the farthest thing from your mind. Getting these concerns handled, however, can be one of the greatest gifts a new couple can give to each other.
First, be aware of the impact of doing nothing. If you were to become hospitalized for any reason prior to your marriage day, the person you love most in the world would not have the legal authority to make your medical decisions and may not even have the authority to see you in the hospital. Your beloved would have no access to your bank accounts and could even be put into a position of having to move out of your shared home abruptly in the event of your death.
Once your marriage is official, your relationship becomes entirely different from both a legal and financial perspective. If you’ve recently said “I do” or have plans to do so soon, here are six essential items you need to address in your plan.
1. Beneficiary Designations
One of the easiest—and often overlooked—estate planning tasks for newlyweds is updating your beneficiary designations. Some of your most valuable assets, such as life insurance policies, 401(k)s, and IRAs, do not transfer via a will or trust. Instead, they have beneficiary designations that allow you to name the person (or persons) you’d like to inherit the asset upon your death.
You should name your spouse as your primary beneficiary (if that’s your wish), and then name at least one contingent, or alternate, beneficiary in case your spouse dies before you.
2. A Will
A last will and testament allows you to designate who should receive your assets upon your death. If you are newly married, you likely want your spouse to receive most, if not all, of your assets, and if so, you should name him or her as the primary beneficiary in your will.
Although your spouse would likely inherit all of your assets should you die without a will, known as dying intestate, depending on state law and whether or not you have children, your assets may not get divided according to your wishes, so it’s always a good idea to create a will (or update your old one) when you get married. If you want to ensure that your will is created and executed properly you should ALWAYS work with trusted legal counsel rather than relying on generic, fill-in-the-blank documents you find online.
Online legal document services may be better than nothing for some people, but they may be worse than nothing for those who truly want to ensure they’ve considered all the options. For instance, an online document service cannot help you anticipate and plan for all the potential issues related to your family dynamics and assets that can arise and lead to conflicts and disputes between your loved ones. With Your Property Law Firm, you will have a trusted legal advisor and you will benefit from our comprehensive inquiry process.
Additionally, if you intend to leave assets to someone other than your spouse in your will, or for some reason plan to leave your spouse out of your will, be sure to check our state’s laws governing marital property. In some states, a surviving spouse is entitled to a certain percentage of your assets regardless of what’s in your will.
Finally, although a will is an essential part of nearly every estate plan, as you’ll see below, having a will alone is rarely enough to ensure your spouse and other loved ones stay out of court and out of conflict when something happens to you.
3. A Trust
Upon your death, assets included in a will must first pass through the court process known as probate before they can be transferred to your spouse or any other beneficiary. Probate can sometimes lead to ugly conflicts between your spouse and other family members. Furthermore, a will only governs the distribution of your assets upon your death – meaning a will offers you zero protection if you become incapacitated and are unable to make decisions about your own medical, financial, and legal needs. If you become incapacitated with only a will in place, your spouse would have to petition the court to be appointed as your guardian to manage your affairs.
To avoid the time, cost, and conflict inherent to an estate plan consisting solely of a will, you should consider creating a revocable living trust, along with your will. If your assets are properly titled in the name of your living trust, they would pass directly to your spouse upon your incapacity or death, without the need for any court intervention.
What’s more, in the terms of your trust, you can even outline the specific conditions that must be met for you to be deemed incapacitated, which would allow you to have some control over your life in the event you become incapacitated by illness or injury. This contrasts with a will, which only goes into effect upon your death and then merely governs the distribution of your assets.
4. Durable Financial Power of Attorney
If you become incapacitated and have not legally named someone to handle your financial and legal interests, the court will choose for you and your spouse would have to petition the court to be appointed as your guardian or conservator to handle your affairs. Though your spouse would typically be given priority, this is not always the case, and the court could choose another family member.
To ensure the person you want can make these decisions, you should create a power of attorney to give them this legal authority. You need two of these documents, and the first one is a durable financial power of attorney. A durable financial power of attorney would grant your spouse the immediate authority to manage your financial, legal, and business affairs in the event of your incapacity.
With a durable financial power of attorney, your spouse would have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting government benefits, and selling your home, as well as managing your banking and investment accounts. Granting durable financial power of attorney is especially important if you live together before you get married because, without it, the person named by the court could legally force your soon-to-be spouse out with little to no notice, leaving your beloved homeless.
The second document you will need is the fifth estate planning essential, a medical power of attorney.
5. Medical Power of Attorney and Living Will
In addition to the durable financial power of attorney, you will also need to create a medical power of attorney. A medical power of attorney is an advance healthcare directive that would give your spouse (or someone else) the immediate legal authority to make decisions about your healthcare and medical treatment should you become incapacitated and unable to make those decisions for yourself.
For example, a medical power of attorney would allow your spouse to make decisions about your medical treatment if you are in a serious car accident or hospitalized with a debilitating illness. Without a medical power of attorney in place, your spouse would have to petition the court to become your legal guardian.
Although your spouse is generally the court’s first choice for guardian, you should spare your spouse the time, money, and trauma involved with the guardianship process by creating a medical power of attorney and naming him or her as your agent.
While a medical power of attorney allows your spouse to make healthcare decisions on your behalf during your incapacity, a living will serves as an advance directive that explains how you would want your medical care handled, particularly at the end of life. A medical power of attorney and a living will work closely together, and for this reason, they are sometimes combined into a single document.
A living will allows you to specify your decisions in advance, such as when you would want life support removed, whether you would want hydration and nutrition supplied, the type of food you would want, and even who can visit you in the hospital.
One tragic example of just how nightmarish things can become in the event you are incapacitated without advance directives in place is the case of Florida’s Terry Schiavo, who spent 15 years in a vegetative state after suffering a heart attack at age 26. Because she had neither a medical power of attorney nor a living will, Schiavo’s young husband fought her parents in court for years for permission to remove her from life support. The resulting litigation made news headlines around the world and exposed a deep divide among Americans over the right-to-die movement.
6. Name Legal Guardians for Your Minor Children
If either you or your spouse has minor children from a prior relationship, or if you are planning to have kids of your own soon, it is imperative that you select and legally document long-term guardians for your children. Guardians are people legally named to care for your children in the event something should happen to you and your spouse.
You should not assume that just because you have named godparents or have grandparents living nearby that everything will be sufficient. You must name guardians in a legal document to ensure your wishes are carried out, otherwise you risk creating needless conflict and potentially a long, expensive court process for your loved ones.
When working with Your Property Law Firm we accomplish this using our comprehensive system called the Kids Protection Plan.
The Kids Protection Plan provides you with the legal planning tools needed to make sure there is never a question about who will take care of your kids if you and your spouse are in an accident or suffer some other life-threatening emergency. Even if you have already named guardians for your kids in your will, either on your own or with the help of an attorney, we often find that these plans contain at least one of six common mistakes that can leave your kids at risk.
This happens because most attorneys are not trained to understand exactly what is necessary for planning and ensuring the well-being and care of minor children. However, as a licensed Personal Family Lawyer, Amanda Vavak has been trained on legal planning for the unique needs of families with minor children at home.
Call us today and schedule a Family Wealth Planning Session with Your Property Law Firm or visit our website at Yourpropertylawfirm.com and schedule an appointment. We can help you put in place a full Kids Protection Plan and determine if there is anything else you might need to ensure the well-being and care of your children no matter what happens.
Do not wait to take care of this urgent matter. In fact, if you have minor children, your number-one planning priority should be to name legal guardians to care for your children should anything happen to you. Your Property Law Firm can help walk you through the process and ultimately provide you with the reassurance that your children will be taken care of in the manner that you choose.
At Your Property Law Firm, we strive to do more than just draft documents; we work to help our clients make informed and empowered decisions about life and death. That’s why we offer a Family Wealth Planning Session. You can begin by calling our office today at (916) 801-8995 to schedule a Family Wealth Planning Session. Mention this article to find out how to get this $550 planning session at no charge.