A Guide to Estate Planning for Married Couples

Estate planning for married couples

Financial responsibilities and legal rights change after marriage in a number of ways. Although married couples often share many things, such as bank accounts or the title to a property, it’s important that you and your spouse create your own estate planning documents. This is helpful in situations where you have individual assets or different wishes for your remains once you pass away.
Plan your estate with your significant other in mind by selecting beneficiaries, determining shared and separate assets, and creating health care directives. And before you start planning, research estate distribution laws for married couples in your jurisdiction because they may affect your estate plans. You’ll be much better prepared with the right documents in place.

Name a guardian for your dependents

If you or your spouse pass away, custody of any minor children remains with the surviving parent. However, to prepare for the possibility of you both passing away, appoint a legal guardian in your Last Will and Testament. This ensures that your children get the care you want them to.
Choosing a legal guardian for your kids takes a lot of thought. As a couple, determine the criteria for an ideal caregiver. Review your list of potential candidates and discuss the responsibilities with your chosen guardian.
Update or create your Last Will to include the names of your children’s guardian(s). Without an updated will, the courts will decide who becomes responsible for their care after you die. You may also want to name a caretaker for any pets, and set aside a portion of money for their care.

Naming your children as beneficiaries of your estate

It’s likely that your children will be the main beneficiaries of your estate. Consider how you want their inheritance to be managed. For instance, you can create a testamentary trust that is managed by the executor of your Will until your children reach adulthood.
You can appoint the same person to both executor and guardian duties. However, choosing different people may ensure that your children’s new guardian manages their inheritance appropriately.

Consider shared property and its distribution

Marital property is the property you share with your spouse and is jointly owned between the two of you. For instance, marital property often includes:
  • Property purchased with money earned during your marriage (e.g., real estate)
  • Property that is held by the couple as joint tenants with a right of survivorship
  • Gifts from family or friends that are meant to be shared equally between you and your spouse (e.g., wedding gifts)
  • Active appreciation of assets (i.e., separate property that increases in value due to marital contributions)

Transferring shared property

You cannot transfer shared property to another person in your Will as long as your spouse survives you. If you pass away, anything you two owned jointly will go directly to your spouse. As well, if you’ve named your spouse as a beneficiary for any insurance policies or retirement plans, you cannot name a different beneficiary for those benefits in your Will.
However, you can talk to your spouse about who you’d like to inherit shared property and assets once you both pass away. Some couples choose to create Mirror Wills, which are separate documents that look almost identical except that they list each other as their main beneficiary. Mirror Wills typically describe the same distribution plan in the event that both spouses die. People who create them often leave the entire estate to their children or other named heirs.
Another option is to set up a shared Living Trust (also known as a Revocable Living Trust or a Grantor Trust). A Living Trust avoids the public probate process, which means that assets transfer to beneficiaries or heirs much quicker than with a Last Will. Married couples who create a Living Trust together typically act as co-trustees while they are both alive. When one spouse dies, the surviving partner inherits the other’s share. When both spouses die, the property passes to the named heirs.
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Consider separate property and its distribution

Separate property is property owned as an individual; your spouse has no ownership rights to it. For example, separate property can include:
  • Assets identified as separate in a Prenuptial Agreement
  • Gifts or inheritances meant only for one spouse
  • The proceeds from personal injury claims
If you created a Prenuptial Agreement before getting married, you may already have an idea of who you want to inherit certain assets. For example, you may want a family business to be passed on to someone with a vested interest rather than to your spouse by default. You can designate any specific assets to your ideal beneficiaries in your Last Will.
Alternatively, a Living Trust also allows you to allocate separate property. In this case, you may choose to designate a co-trustee to work with your spouse when dispersing separate property after your death. With a Living Trust, you can ensure your spouse is taken care of and your chosen beneficiaries inherit what you left for them.
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Select an executor and attorney-in-fact

When creating a Last Will and Testament, you’ll need to choose at least one executor to distribute your assets, close your accounts, file your taxes, and wrap up your financial affairs after you pass away. If you and your spouse create Mirror Wills, the executor should be the same person for both documents.
Some couples choose to appoint each other as the executor of their Will. While you can name the same person as a beneficiary and executor in your Will, you should consider naming an alternate executor to prepare for the possibility of your spouse predeceasing you.
Another important step in estate planning is appointing an attorney-in-fact with a Power of Attorney. An attorney-in-fact has the authority to manage your legal and financial affairs if you’re absent or incapacitated. Some situations may not allow your spouse to make legal or financial decisions for you but you can guarantee their authority over your affairs by creating a Power of Attorney.
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Determine your medical and general care preferences

When you’re married, health care professionals will often defer to your spouse for health care decisions when you can’t make them yourself. However, to be certain your spouse has the authority to make health care decisions on your behalf, appoint them as your health care agent (also known as a proxy). Likewise, you should clearly document your preferences regarding certain health care treatments.
Our Living Will gives you the option to combine a Health Care Directive with a Medical Power of Attorney so you can accomplish both these tasks with a single document.
Although you and your spouse may still have ample time to plan, you should start thinking about:
  • How you want to spend your senior years
  • How you want your life to be celebrated once you pass away
  • What you want done with your remains
When you’re ready, you can document your wishes regarding general care in a Personal Care Profile and outline your funeral with an End-of-Life Plan

Execute and update your estate plan

Once the essential documents of your estate plan are in place, make sure they stay up-to-date and accurate to your current life. Review your estate plan whenever a significant life event happens (such as after a divorce, the birth of a child, or the loss or gain of a major asset) and update it accordingly.
As a married couple, it’s important to make your estate wishes clear to each other while simultaneously supporting each other’s goals. Working together and being straightforward is essential for successful estate planning.
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