With wedding season in full swing, many couples are busy ensuring that their special day goes off without a hitch. Although the honeymoon and other wedding details are likely the foremost on the minds of most of these couples, it is important to not neglect the important, but less exciting aspects of the union. One of such items that every newly married couple should see to is putting a sound estate plan in place to make sure that everything is taken care of, should something unexpected happen.
After the marriage, couples should consider changing their beneficiary designations on their non-probate assets, such as life insurance, retirement accounts and bank accounts with a payable-on-death designation. These designations are not affected by the marriage and will remain the same unless action is made to change them. Additionally, simply making out a will does not change the designations. Failing to update the designations could mean that these assets will inadvertently go to the parents, ex-spouses or other unintended beneficiaries.
Distribution of Assets
A marriage is one of life’s events where a review (or drafting) of the plan for distribution of assets after death is called for. For those entering a subsequent marriage, it is often necessary to make changes to the existing will or trust to reflect the changes brought by the marriage. For first-time marriages, it is important to draft the necessary documents that govern the distribution of probate assets (stocks, motor vehicles and personal items) in the event of death. Although a young couple may not have many assets, this will likely not always be the case, so drafting a will now will avoid problems that could arise later, should a spouse unexpectedly die.
If the couple has (or expects to have) children, it might be helpful to set up a trust that would provide income for their needs until they reach the age of majority, in case both parents die or become unable to care for them. Additionally, couples that have children should ensure that they have named a guardian in their wills. A guardian is someone that is in charge of raising the children in cases where the parents have died (or are otherwise unable to). Since a court would otherwise be put in charge of making this important decision, designating a guardian can ensure that someone sharing the couple’s values raises the children.
Death is not the only unexpected thing that couples should plan for, as incapacity is also a threat. In fact, it is probably more likely to occur than death. In such an event, a spouse may not be able to make the necessary healthcare or financial decisions on his or her partner’s behalf, unless the necessary documents are in place. In order to ensure that your healthcare wishes are carried out, it is important for each spouse to have an advance directive for healthcare. This document allows each spouse to communicate their wishes regarding life-support, feeding tubes, resuscitation and other artificial life-prolonging treatments. Additionally, the document allows each spouse to appoint a healthcare proxy to make decisions on behalf of the incapacitated spouse.
Also, it is important to ensure that each spouse’s financial affairs are able to be taken care of in the event of incapacity. Drafting a durable power of attorney allows each spouse to appoint someone to act as their agent. The agent is empowered to pay bills and taxes, enter into contracts and any other power the spouse designates in the document.
An Attorney Can Help
If you are getting married (or have recently done so) there are many estate planning issues that need your attention. An experienced estate planning attorney can consider your new status and ensure the necessary documents that are necessary to protect your interests and carry out your final wishes are in place.