Getting engaged to someone new and planning your lives together is an exciting and stressful step for any couple. If you have already married before, then it is a fresh start to life to enjoy. However, also be sure to update your estate plan to make sure it reflects your life now and moving forward versus the marriage you were in before. Here are steps to take to make that process easier for you.
Draft Your Will – If you don’t already have a will, then consider getting one prepared by a competent attorney should be on your to-do list. The reason being that is you don’t have any documentation set in place before passing away, then all of your assets will be immediately subject to probate court and that process. Moreover, in the case of remarriage, state intestacy laws can determine how and to whom your assets pass through to, as well as share size.
For example, if you remarry to a new spouse with children and then pass away, those state laws may end up denying any asset allocation to your new stepkids. Or, your new spouse may end up with the majority of assets and not allow anything for other family members of yours. Probate and intestacy laws can cause sizable havoc upon your family if you don’t take the time to determine what goes to whom yourself before the government does it for you. Consider this step one when you update your estate plan.
Update Beneficiaries – If you already have a will or other estate plan in place, then make sure to review the documentation and update your beneficiaries. Remember, even if you remarry but have your previous spouse listed as a beneficiary on documentation, all of that material will need to be changed to reflect onto your new spouse. For example, any assets included in a life insurance policy or qualified retirement plan (QRP) will automatically pass through to the beneficiary listed on the policy or account.
Even if you update your will to accommodate your new spouse, if you do not also list that person as the new beneficiary of your other policies and retirement accounts then they will not receive the assets within them. It is very likely that your previous spouse could receive everything with your new spouse receiving nothing because of a lapse in paperwork. Again, insurance policies and retirement accounts are not beholden to a will’s beneficiaries so remember to keep all of that paperwork current.
Update Power of Attorney – When it comes to health care directives or other legal matters in case you ever become incapacitated, make sure that your power of attorney documentation is reviewed and revised accordingly when you update your estate plan. If you are subject to diminished capacity and your life depends on someone else’s judgment when you are unable to exercise it yourself – it’s pretty significant that it is someone you trust.
Leaving that power with someone no longer in your life, instead of the person you now choose to spend it with is not a smart move. While it is possible for another family member or new spouse to petition a court for power of attorney successfully, the decision should be in your hands to make. Changing the documentation is a relatively straightforward process that will make life much easier if an emergency happens.
Review Asset Titles – Here is another circumstance where a will alone has virtually no sway – assets titled under joint tenancy with rights of survivorship, community property with rights of survivorship, or tenancy by the entirety will all automatically pass through to the surviving owner. It does not matter if your estate plan says otherwise; if assets under such titles exist, they will turn over to the survivor whether you like it or not.
If you want certain assets to go to someone else besides your surviving spouse, then make sure to revise the title accordingly. If your new spouse needs adding to a title, then do that as well. Otherwise, your ex-spouse could end up with property or other assets you do not want him or her to have because you did not say they weren’t entitled to it anymore.
Include Personal Property in Will – When we think of wills or other estate plans, assets considered big-ticket items are properties, insurance policies, savings accounts, etc. However, it is a good idea also to include other personal assets that may have substantial sentimental, as well as, monetary value. Family heirlooms, for example, are common to include in a will to ensure they distribute accordingly among descendants and other beneficiaries. Anything that you can include in a will is advised to do, because otherwise, it can easily end up stuck in probate court. The less you have to deal with that system, the better off everyone will honestly be in the end.
Consider A Living Trust – All of the talk here so far has been about wills and asset titles; however, another option to consider is organizing and placing your assets in a living trust. In short, a living trust gives you the power to ultimately control and determine your estate plan without any outside interference from a probate court, as well as keeping all of your affairs confidential rather than making them public record. A living trust cuts out unnecessary legal costs and simplifies the distribution of assets by allowing you to title your assets directly into it.
In many ways, they contain they surpass the power of a regular will. If you own properties across various states, for example, you can have them all titled to your living trust so that once you pass on, your beneficiaries can avoid dealing with probate courts located in each state where those properties exist. Living trusts also allow you to designate beneficiaries easily and is straightforward to update at your discretion. Another benefit is they allow you to update your estate plan much more easily.
One of Anderson’s core areas of expertise is estate planning, and living trusts are a common legal entity we help clients draft and maintain frequently. By helping them ensure both discreet ownership and distribution of their assets through living trusts, Anderson has proven itself to be an expert in the field. If you are currently looking to update your estate plan, whether due to a new marriage or other circumstances requiring attention, then be sure to contact us today for a free 30-minute strategy session with one of our expert advisors. We have decades of experience working in this field and can quickly assist your estate plan needs moving forward.