From ‘I Do’ to ‘What If’: Estate Planning Must-Do’s for Newlyweds – Part 2
Getting married and starting a new chapter in your life is an exciting time. It’s also a time that requires a lot of housekeeping, such as updating your address if your marriage includes a move, changing your tax filing status with your employer, and adding your new spouse to your bank and credit card accounts.
But did you know that creating (or updating) your estate plan should also be on your post-wedding to-do list?
Last week, we started to explore the key estate planning components every newlywed couple needs to protect their rights, wishes, and plans for their assets now and in the future. This week, we’re continuing the conversation with three more estate planning must-do’s for newlyweds. If you missed last week’s blog, click this link to catch up.
04 | A Living Trust
Are you surprised to see a Trust on our list before a Will? Here’s why a Trust is next on your to-do list. If you are newly married, there’s a strong likelihood that you are relatively young in your life and your career, which means there will be many changes in your assets, family, and wishes as the years go by.
Or you might be re-marrying or getting married later in life and already have a well-established home, financial portfolio, and family that you are now combining with your partner’s life.
In either situation, you’re in a position of blending your life as a single person with the life and wishes of someone else, and the best way to make sure your wishes for your assets and your new family are honored during your lifetime and after your death is to document them through a Trust legally.
With a Will, assets must pass through a court process known as probate before being transferred to your spouse or any other beneficiary. But once probate is completed, your loved ones can do whatever they want with the assets they received from you through your Will. The purpose and power of your Will ends when probate ends.
The court probate process required for Wills can take months or even years to complete, often leading to ugly conflicts between your spouse and other family members. Plus, a Will only governs the distribution of assets upon your death that are not already covered under your Trust or by your beneficiary designations.
With a Trust, no court involvement is needed, and you can set parameters for how you want your assets distributed over a predetermined amount of time. For example, if you have children or plan to, you can ensure the assets are safeguarded in the Trust until your children reach a certain age. Suppose you have children from a prior relationship. In that case, you can also ensure that your assets financially support your new spouse during their lifetime but that your remaining assets will be returned to your children after your new spouse’s death instead of going to your spouse’s side of the family.
Having a Trust hold your children’s inheritance can also help eliminate conflict between step-siblings and between your children and your spouse. Even if your children are adults, leaving their inheritance in a Trust can help avoid family conflict and provide them with a lifetime of asset protection from creditors and lawsuits.
Finally, using a Trust as the main vehicle to distribute your assets during your incapacity and after your death allows you to design a custom plan for what happens to your assets far into the future, ensuring that the goals you have for your loved ones are nourished and that your assets are carefully managed and protected even after you’re gone. You can do this by creating contingencies and incentives in your Trust that encourage your heirs to behave in certain ways. For example, for your sibling to receive their inheritance, you could require that they seek drug counseling first or that your children pursue a course of study before receiving a distribution of income from the Trust.
05 | A Will
A Will allows you to designate who should receive your assets not already included in your Trust or directed by beneficiary designations. Ideally, your Trust will include all of your assets. But, if you forget to add an asset to your Trust, a Will ensures that the forgotten asset is “poured over” into your Trust and included under its terms for how you want your assets to be distributed and managed.
If you don’t have a Trust, your Will designates who will receive your assets through the court probate process. Your Will may also direct any charitable donations you want to make and can be used to create a Trust upon your death if the circumstances call for it – such as if one of your heirs is disabled at the time of your death.
Even if you don’t think you need a Will because you don’t have many assets or other estate planning pieces, having a Will as a backup or “pour-over” tool is an essential part of your estate plan. Plus, depending on state law and whether or not you have children, your assets may not get divided according to your wishes if you don’t have a Will, so it’s always a good idea to create one (or update your old one) when you get married.
06 | Legal Guardians for Your Minor Children
Finally, if you or your spouse have minor children from a prior relationship or are planning to have kids of your own, you must select and legally document guardians for your children. Guardians are legally named to care for your children if you or your spouse die or become incapacitated.
To make sure your children are never left in the care of strangers for even a minute, it’s crucial to name both short-term and long-term legal guardians for your kids. That way, someone you trust will always have the authority to be with your children during a short-term or long-term emergency.
Do not assume that just because you have named godparents or have grandparents living nearby they will automatically have the authority to care for your children if you can’t. The only way to ensure that your children are cared for by the people you would want is to name guardians in a legal document. Otherwise, you risk creating needless conflict between family members and a potentially long, expensive court process for your loved ones.
Planning for a Lifetime of Happiness
If you’re new or planning to be married soon, I wish you true happiness in your marriage and your new life ahead, and I truly want to help you protect the dream and future you are building with your new spouse. With the excitement of your wedding ending, now is the best time to create an estate plan for your new family, and it may even be the most crucial time to create a plan for them.
We often think that incapacity and death don’t happen to newly married couples, but unfortunately, no one can predict the future. If an illness or tragedy does strike you or your new spouse, the ramifications of not having an estate plan in place can be even worse than for a couple who has been married for a long time.
No matter the stage of your relationship or marriage, I can help ensure your spouse and family are protected and cared for now and for years. Through our estate planning process, I’ll guide you from the heart on the estate planning
questions and decisions that are essential for your family’s well-being and ensure you feel comfortable.
Here’s to a very happy ever after.
Your Estate Planning journey begins with us by scheduling a Family Wealth Planning Session. During this two-hour meeting, you will meet with an attorney to explain how an Estate Plan can benefit you and the ones you leave behind. Schedule your Family Wealth Planning Session today by calling us at 208-733-7200 or by clicking the link here.
This article is provided as a service of Twin Falls Estate Planning, Personal Family Lawyers®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love.