6 Estate Planning Necessities for Newlyweds
The estate planning attorneys from Bodie, Attorneys at Law describe important essentials regarding your estate plan after you are married.
The first thing you want to do as a newlywed probably has nothing to do with estate planning, but it’s critical to tackle this item sooner rather than later. Taking the time to sit down with your spouse and an attorney will ensure that your new family unit is prepared for the unexpected.
- Update your account beneficiaries. This is the quickest and easiest step, so approaching this first makes sense. Changing your beneficiary or transfer on death designations for your accounts is important for your 401(k) and IRA. If you or your spouse wish to leave an account to someone else, or if you’d prefer to split them between parties, you’ll need a notarized acknowledgment.
Speak with an experienced estate planning attorney and update beneficiaries for your insurance policies, existing will or trust, bank accounts, investment accounts, 401(k) plan or other employer-sponsored retirement accounts, IRA and health savings account.
- Review your will. You and your new spouse need to talk about how you want your assets divided should anything happen to either or both of you. This may be an uncomfortable subject, so take your time and focus the conversation on the people you care about should the unfortunate occur.
How should your assets be split among your existing or future children and/or your parents? Who would you want caring for your children, should the worst happen? Be sure to speak to those people and confirm that they are willing to potentially take on a very large responsibility. Once this is done, make sure the essential orders are noted in a formal will. You do not want the courts making decisions about your assets or your children’s future.
- Consider durable powers of attorney. Unless you currently have a durable power of attorney in place, your spouse will not be able to handle your individual financial affairs if you become incapacitated. To ensure that you each are able to make decisions on the other’s behalf, having a durable power of attorney in place is crucial.
Check with each financial institution you work with to see if they require their own paperwork. This could save you a lot of time and stress later on. If one of you prefers not to take on this responsibility, find a third party who you both trust to represent your family.
- Contemplate a trust if you have sizeable assets. If you and/or your spouse own a substantial amount of property or several accounts that you’d prefer to combine, consider a trust. This is especially wise if you wish to maintain your privacy and avoid probate. Having a trust in place provides more options for managing and bequeathing assets and allows for smoother property transactions.
- Ensure that your assets are titled property. Joint tenancy with rights of survivorship transfers an asset to your spouse if you should pass. However, it does not provide for power of attorney if you are incapacitated. A tenants-in-common arrangement ensures that each person’s share is distributed as directed by his or her will, but won’t be much use to your family if you do not have a will at all.
Research titling options with an experienced estate planning attorney. In doing so, you will see which arrangement will work best for you as a couple.
- Draft your advance medical directive. Make sure your spouse understands your wishes in the event of an incapacitating medical situation through an advance medical directive. Additionally, nominating each other as healthcare proxies is important. These documents will outline your medical preferences and will give each of you the requisite power of attorney to access medical records and make healthcare decisions for the other.
It’s important to talk about subjects like life support and exhausting all other medical options. Knowing each other’s wishes is not sufficient: note them in writing with an attorney’s assistance.
Although estate planning is never a favorite topic for anyone, especially a couple just beginning their life together, planning for the worst can ultimately give your family the gifts of security and peace of mind. For more information regarding estate planning, contact an estate planning attorney from Bodie, Attorneys at Law today.