Estate Planning for Newlyweds
By Cody Ross, Esq., Intern for
AnnMichelle G. Hart, Esq.
May 10, 2021
Your wedding day is one of, if not the, best day of your life. You get to commit to a lifetime of being with your spouse. After the honeymoon though, it is time to start planning for one of the worst days of you and your spouse’s lives. It is crucial for a newly married couple to start the estate planning process as soon as possible after their marriage. Although nobody likes to think about their or their spouse’s deaths, especially right after getting married, it is critical to start then. Without creating an estate plan as a couple, your inheritance and powers to act when your spouse dies or is severely incapacitated becomes at risk.
One of the first, and easiest, things that you can do to start your estate plan is to create a list of all of your current assets, accounts, and insurance policies. This includes everything from bank accounts, retirement accounts, life insurance policies, to home and car titles. Assembling this list will not only allow you to make the necessary changes to beneficiaries and joint account holders, but it will also allow you to understand what you and your spouse have brought into the marriage. Many of these accounts and assets will allow you to mark who you want to receive the account after your death and changing that person to your spouse will allow them to receive those benefits.
The next step, after understanding what assets each spouse has, is to discuss what each of you want to happen to your assets after your death. Important, albeit awkward, questions need to be asked, such as if your spouse wants all of their assets to go to you or if they want their assets divided among other people as well. This is especially true if one, or both, spouse has children from outside of the marriage. It is important to understand if some assets and insurance benefits are going to support a spouse’s child.
Another important aspect when it comes to children, even if neither spouse brought a child to the marriage, is who you want to take care of your children should both of you pass on. It is important to discuss if one set of your parents will take over as guardian for your children, if you want to designate a different family member, or a third party to take custody of your children. This is important to consider even if you do not currently have children as it can be prearranged and binding once you have children. Having these hard discussions now will save your spouse or family from an incredibly difficult process should you and/or your spouse pass.
The last step in the process is to start drafting all of your estate planning documents. The two most common and well known are wills and trust agreements. It is also important to consider if you and your spouse would prefer to pass your assets through a will, a trust, or a combination of both. The main differences between the two are that wills pass ownership after your death but must be filed with the probate court to be enforceable (and therefore become public record), while trusts pass ownership of assets into the trust either at death or during your life and are able to be enforceable without a court filing. This allows for a trust to manage a larger estate and not become public record. Both are valid and acceptable ways to administer an estate. An estate planning attorney will be able to help you determine what will work best for you and your spouse.
The other documents that are important to draft are Powers of Attorney and Healthcare Directives. A Power of Attorney allows you to designate someone that you want to act on your behalf should you become incapacitated or unable to care for yourself for any reason. Powers of Attorney can relate to financial matters, healthcare manners, or a combination of both. You are able to put restraints on what powers you want to designate in your Power of Attorney. A Healthcare Directive, also called a living will, is a document that designates how extensive of measures you want to have performed should you be in a life-threatening condition. This includes if you want artificial nutrition, if you want all measures exhausted, and how long you want to be on life support for. A Healthcare Directive is provided directly to medical professionals and directs their care. Healthcare Directives can be used instead of Healthcare Powers of Attorney, should you wish. Washington accepts both Healthcare Directives and Healthcare Powers of Attorney, so it is up to you and your spouse to determine what you would like to use.
While it may seem premature to create all of these documents right after getting married, especially if you are young, it is crucial to give your spouse the powers they need to support you. Without Powers of Attorney or a Healthcare Directive, they may not be entitled to make financial or healthcare decisions for you on their own and may have to consult with a guardian or your family members prior to making a decision. It is best to plan ahead to make an already difficult time for your spouse, or yourself, as easy as possible to manage.
Another reason to create these documents now is that if your spouse does not have a will at the time of their death, you may not be able to receive their whole estate, even if that was their wish. Washington is a community property state, which means that all property (with some exceptions) that spouses receive during a marriage are co-owned by both spouses, but all property owned by a spouse prior to marriage remains their separate property. This means that if your spouse dies without a will, then you are entitled to all co-owned property as well as one-half of their separate property if your spouse left children or grandchildren. If there was no children or grandchildren, but the spouse had surviving parents, then you are entitled to three-quarters of their separate property. And finally, if your spouse had no children, grandchildren, or parents, then you would be able to receive their full separate estate. This illustrates how even if your spouse wanted to give you everything, if they don’t have a will, then you may lose part of your expected gift.
By taking the time to thoroughly go through you and your spouse’s estates and accounts it will allow you to create a proper and enforceable estate plan with your spouse. Without this estate plan you can lose some of your interest in their estate. You also may not be able to make the necessary financial and healthcare decisions that your spouse would want you to make. Having these difficult decisions right after the happiest day of your life will help avoid the pain and confusion during the hardest days of your and your spouse’s lives. To properly execute your estate plan, it is crucial to contact an estate planning attorney. They will be able to guide you through this complex area of law and create an estate plan that will fulfill you and your spouse’s wishes and provide you and your spouse with the proper level of protection.