Marriage means sharing your life with someone else. Newlyweds, therefore, may want to build an estate plan together shortly after the wedding. Estate planning can also be handled before the wedding. An estate plan will ensure that all financial and medical matters can be properly handled in the unfortunate event that one spouse becomes incapacitated or passes away. While this may not be a pleasant thought, couples who lack a strong estate plan often run into preventable, expensive complications when the unthinkable does happen. Estate planning lawyers help clients to ensure that their financial and medical wishes will be fulfilled. Consider contacting an experienced estate planning lawyer from Von Rock Law today at (866) 720-0195 to learn more about estate planning for newlyweds.
Most married people choose to designate their spouse as their beneficiary for various accounts. California is a community property state, which means that a person’s spouse must be his or her beneficiary. This ensures that certain accounts will be transferred to the surviving spouse if one spouse passes away. Updating beneficiaries should be one of the first estate planning tasks for newlyweds. The following accounts typically designate a person’s spouse as the beneficiary, so newlyweds should consider updating them:
- Checking and savings accounts
- Life insurance policies, both employer-provided and stand-alone
- Investment accounts, including mutual funds, bonds, stocks, etc.
- Retirement accounts, such as IRA, Roth IRA, 401(k), and 403(b)
- Military benefits
- Pension accounts
- Any other property, titles, or assets that currently list another beneficiary
Consolidating Accounts or Creating New Ones
Several types of accounts are commonly either consolidated or created as joint accounts for newly married couples, including:
- Bank accounts
- Credit card accounts
- Health insurance—newlyweds qualify for special enrollment periods
- Car insurance—updating to a family plan might offer better rates than individual coverage
- Mobile phone plans
- Titles of ownership for major assets, such as real estate and vehicles
Creating or Updating a Will After Marriage
People who already have a Last Will and Testament (will) should consider updating the document after marriage, and those who do not have one should create one. A will is designed to establish who will receive a deceased person’s assets after he or she passes away. Most married individuals name their spouse as the primary beneficiary in their will, allowing the spouse to inherit the majority of their assets.
According to the California Legislature, individuals who die intestate (without a will) have their assets distributed by the state. While this process typically awards the majority of assets to the surviving spouse, a will can ensure that the assets are distributed exactly according to a person’s wishes. Wills are especially important when children are involved, as most people want to set specific guidelines for how their assets will be distributed among their spouse, children, and other family members. You can learn more about creating a will and other matters related to estate planning for newlyweds from an estate planning attorney at Von Rock Law.
Should Newlyweds Create a Trust?
When an estate plan includes a will and no trust, the assets of the deceased must first go through a court process called probate before they can be distributed to beneficiaries. This process can be lengthy, taking months and even years for more complicated estates. Wills are also more limited than trusts, as a will only decides what happens with assets when the owner dies. A trust may include provisions that dictate how medical and financial decisions should be made if a person becomes incapacitated.
A revocable living trust can be included alongside a will in an estate plan. This trust becomes the legal owner of assets included in the trust, and the trust is co-owned by both spouses. This allows the assets of the trust to more easily pass to the surviving spouse and other beneficiaries without needing to go through the probate process. The Attorney General of California suggests that estate planning professionals can provide guidance when creating a trust.
Financial and Medical Powers of Attorney
Power of attorney (POA) is one of the most integral parts of a comprehensive estate plan. A power of attorney designates an individual with the legal authority to make financial and medical decisions on a person’s behalf should that person become incapacitated and unable to make those decisions on his or her own.
Most newlyweds will want to consider naming their spouse as both their medical and financial power of attorney. This allows the spouse to continue paying bills, control all bank accounts, manage investments, file taxes, and make medical decisions on behalf of the incapacitated spouse.
Updating an Estate Plan Throughout the Marriage
Estate planning is not a singular event. Newlyweds should not simply create an estate plan and forget about it. Estate plans need to be updated periodically throughout the marriage. Estate planning professionals typically recommend reviewing and updating an estate plan about every three to five years. Estate plans should also be updated in response to major life changes.
Some common scenarios that require updating an estate plan include when:
- The value of assets included in the estate plan has increased significantly
- Certain assets have been sold or donated
- A new business has been started since the estate plan was created
- A beneficiary or guardian has passed away
- Moving to a new state requires an update based on the new state’s estate planning laws
- Adding or removing beneficiaries
- Changing trustees or executors of wills
- A child is born to the couple
- One spouse files for divorce
Learn More From an Estate Planning Lawyer Today
After returning from the honeymoon, newlywed couples should begin organizing their new life together. For many couples, estate planning will be a central part of this process. A well-structured estate plan helps to ensure that a person’s wishes will be fulfilled after he or she passes away and that the family can inherit assets without complications. For help with estate planning for newlyweds and creating an estate plan that will meet your family’s needs at various stages of life, consider contacting an experienced estate planning lawyer from Von Rock Law today by calling (866) 720-0195 to schedule a consultation.