Just Married? What Newlyweds Should Consider in Their Estate Plan

Marriage is all about building a life with the person you love. And with that in mind, estate planning should be a part of that process.

It might seem strange (or even inappropriate) to plan an estate as soon as you get married, but doing so is essential for protecting both of your futures. In fact, taking the time to create an estate plan is, ultimately, an act of love.

Below, we’ll help you navigate the most important parts of estate planning. Here’s what you need to know.

Understanding the Basics of Estate Planning

Many people believe that estate planning is simply a means of deciding how you want to distribute your assets after your death, but that’s a common misconception.

Estate planning includes several vital elements, such as:

• Wills
• Trusts
• Power of attorney
• Healthcare directives

These aspects are essential for two central reasons: For one, they protect both of your wishes. Beyond that, they also ensure that if one of you passes away before the other, the surviving spouse will be financially secure.

The Significance of a Will

A will dictates how your assets will be distributed in the event of your death. You and your spouse might have separate wills already written, but because married couples almost always have some shared assets, it is important that the wills be updated to reflect the marriage..

But even with that said, wills don’t only deal with property. If you have children, a will lets you name guardians who will care for your children if you no longer can.

If you don’t have a will, the state may step in and decide how to distribute your assets. The problem with that is, in many cases, its decision will go against what the decedent would have wanted.

Joint Ownership and Beneficiary Designations

Many married couples share houses, vehicles, bank accounts, and other such assets. When you have joint ownership and one of you passes away, the other spouse keeps the asset in question.

You probably have life insurance policies and retirement accounts in place as well. When you get married, make sure to update both to ensure you are each other’s beneficiaries.

Powers of Attorney and Healthcare Directives

Having a durable power of attorney is crucial. When you appoint someone as such, they are responsible for making healthcare and financial decisions in the event you no longer can. For example, if you’re in an accident and put into a coma, the agent you appoint in your durable power of attorney will handle your taxes and other financial obligations.

Both spouses should also have a healthcare directive (commonly called a “living will”), a document that outlines individual treatment preferences. These two documents can grant you peace of mind; in the case of a healthcare directive, it can save the other spouse from having to make agonizing life-or-death decisions.

Trusts as an Estate Planning Tool

A trust acts as a means of managing your assets both during life and after death. There are three main types of trusts you should consider when estate planning:

• Marital Trust: If a spouse passes away, their assets pass to the surviving spouse, tax-free
• Revocable Trust: A trust that can be easily amended (usually used for distributing assets after death)
• Irrevocable Trust: A trust that cannot be easily amended (and in some cases, cannot be changed at all)

Your estate planning attorney will help you decide which type of trust suits you.

Planning for the Future Together

It’s important to start estate planning as soon as you’re married. But don’t make the mistake of thinking that you’ll be done with estate planning forever. Your estate plan should evolve and change with you. For instance, if you buy a house or have a child, you’ll want to update your estate plan to reflect that.

As such, it’s a good idea to review your estate plan periodically. It can represent a complicated area of law, though, so regularly consider scheduling meetings with estate planning attorneys.

Estate Planning: The First Step to a Secure Future

A new marriage is full of unknowns. But if you and your spouse take the time to create an estate plan, you’ll be one step closer to a happy, secure future and the peace of mind that comes with it.