The Wealth Counselor
Helping Couples Plan for Their Future
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October is one of the most popular months for couples to tie the knot in the United States. While wedding planning most often includes tuxedos, dresses, rehearsal dinners, guest lists, and the honeymoon, an overlooked part of pending nuptials is estate planning.
For younger couples beginning a life together and getting married for the first time, estate planning may not be a terribly complicated endeavor. With minimal property and savings, simple wills, financial powers of attorney, and healthcare directives may be sufficient and prudent planning for the first years of marriage. The age at which couples are getting married for the first time continues to creep upward, however. It is therefore common for individuals to accumulate significant amounts of property, savings, and investments during their single years. When couples with property beyond the most simple items marry, estate planning becomes much more urgent. It is even more crucial when children are born into the marriage or when entering a second or third marriage, perhaps creating a blended family. If your clients are considering marriage or have recently tied the knot, reviewing the following information with them can help them tackle the critical task of planning for the management and distribution of their property should either of them become unable to manage their affairs or die sooner than expected. Challenge Their Assumptions An all too common mistake that married clients make when approaching estate planning is assuming that their spouse sees things the same way they do. The following questions should be asked of each spouse:
Joint or Separate Estate Plans The decision to jointly engage an attorney to assist with an estate plan may not be as simple as it would seem at first blush. Depending upon the clients’ circumstances, it may be advisable for a couple to engage separate legal counsel to assist with the estate planning process. If any of the following circumstances apply to your clients, you should advise them to give serious thought to hiring separate counsel for their estate planning:
On the other hand, for those clients who are willing to communicate and resolve the differences discussed above, it may be possible to assist them with their estate plan. One advantage of joint legal counsel is that the attorney can act in some ways as a mediator and educator, helping clients identify and craft creative solutions to challenges that may arise during the estate planning process. Additionally, jointly hiring legal counsel tends to be a less expensive solution and communication tends to flow much more freely when fewer individuals are involved. Elective Share Laws It is important to understand that even if clients do separate estate planning, the United States has elective share laws that are designed to ensure that a married individual cannot completely disinherit a spouse or minor child from another marriage. The reason for these types of laws is that traditionally, lawmakers felt that these family relationships deserve to be protected from financial ruin by an individual who perhaps would unwittingly or unwisely attempt to disinherit a spouse or child dependent upon that individual for support. These elective share laws allow a disinherited spouse or child who is still dependent upon the deceased individual to legally claim a percentage share of the deceased individual’s accounts and property regardless of what the will or trust provides. If spouses have agreed to leave their entire estate to someone other than the surviving spouse, they will likely need to sign a prenuptial or postnuptial agreement in which the disinherited spouse waives elective share rights. Such a waiver must meet certain requirements to be valid, which can vary by state. For example, most state laws require that the disinherited spouse must have been represented by independent legal counsel when negotiating the waiver in the marital agreement. Unmarried Couples Marriage today is less common than it was a few decades ago, with more couples choosing to live together without the legal consequences of marriage. Suppose your client is in such a relationship, but feels a deep financial commitment to the client’s partner. In that case, the client may be in even greater need of a carefully crafted estate plan depending upon the client’s goals. In nearly every state, intestacy laws that govern how an individual’s property is to be managed when that individual is unable to manage their own affairs or dies without a valid will or trust typically do not allow for an unmarried partner to receive the individual’s property. To ensure that property passes to a partner, certain legal steps must be taken:
An unmarried client should also consider drafting a healthcare power of attorney and living will (also called an advance healthcare directive) naming the partner as a medical decision maker should the client be unable to make or communicate the client’s medical wishes. Estate Planning When the Marriage Is on the Rocks Sadly, many marriages ultimately end in divorce. If a couple is in the process of divorcing, it is important to consider the implications of any current estate plan in place should something suddenly happen to your client. Some decisions that the client might want to change immediately include the following:
As you can see, it can be critically important for clients with spouses, partners, or children to obtain solid legal estate planning counsel. Without careful planning, a client is almost guaranteeing that their loved ones will experience frustration, expense, and delays when it comes to the management and distribution of their accounts and property if something happens to them. Conversely, a carefully crafted estate plan can provide significant peace of mind for your clients and their significant others for years to come. Call our office today for a virtual or in-person meeting to discuss how, together, we can help your clients achieve their important estate planning goals. |
Law Offices of Kimberly Lessing, APLC • 4740 Green River Road, Suite 117-H • Corona, CA 92880 • (951) 279-6626
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