Marriage is the start of a beautiful new chapter but, along with the excitement, it’s also the perfect time to make a critical legal move as a couple: creating your estate plan. While discussing incapacity and death may feel out of place amidst newlywed bliss, planning now is one of the most loving gifts you can give your spouse.
Marriage changes many aspects of your legal and financial life, but it doesn’t automatically ensure that your spouse can manage your affairs or inherit your assets. Without a plan, your spouse may face unnecessary legal, financial and emotional burdens in the event of incapacity or death. Here are three essential tools to include in your newlywed estate plan.
Update beneficiary designations: Your most valuable assets – such as life insurance, 401(k)s and IRAs – transfer directly to the beneficiaries you’ve named, not through your will or trust. Updating these designations is a simple but vital step to ensure your spouse is the primary beneficiary. Don’t forget to also name contingent beneficiaries in case your spouse predeceases you.
If you have or plan to have children, create a trust to manage these assets. Never name a minor as a direct beneficiary, as this could require court involvement and hand the child full control of the funds upon turning 18. A trust provides safeguards, allowing you to manage distributions responsibly and protect your children from potential overspending or legal issues.
Create a durable financial power of attorney: A durable financial power of attorney grants your spouse legal authority to manage your finances if you’re incapacitated. Without this document, your spouse may have to petition the court for guardianship or conservatorship, a time-consuming and costly process.
This document ensures your spouse can handle critical matters like paying bills, managing investments or selling assets during your incapacity. If you live in a state that doesn’t recognize community property laws, this is especially crucial, as your spouse may not have automatic rights to assets titled in your name alone.
Establish a power of attorney for healthcare and living will: A power of attorney for healthcare gives your spouse the authority to make medical decisions on your behalf if you’re unable to communicate. Without this, they would need to go through the court process to become your guardian, which can lead to delays, conflicts and added stress.
Pair this with a living will, which outlines your preferences for end-of-life care, such as life support or intravenous hydration and nutrition. By documenting your wishes, you ease the emotional burden on your spouse during challenging times.
Between adjusting to married life and combining finances, estate planning may not seem urgent – but it is one of the best ways to secure your future together. Start your plan now to ensure your marriage is protected through every “what if.”
Stay tuned for Part 2, where we’ll explore additional tools to complete your newlywed estate plan.
Send your questions to ccolan@colanlegal.com and use “Alpine Mountaineer estate planning question” as the subject. We’ll answer your questions in our upcoming issues.
This article is provided by your local estate planning attorney, Corina Colan.
The Law Office of Corina I. Colan / (909) 265-3315 / www.colanlegal.com
0 Comments