Estate Planning for Newly Married Couples
If you’re one of the 45,000 marriages that take place in Washington every year, you know how exciting it is to finally say “I do” to the person you want to spend your life with. You might think that estate planning is only for those who are older, not the newly married. You would be wrong. An estate plan is a gift that you can give yourselves to have peace of mind that everything you work hard to build as a couple is shared as per your wishes. You may even want to pass down family heirlooms or other assets that you had prior to the marriage to your spouse. Without an estate plan in place, you put some of these wishes and desires in jeopardy and estate planning for newlyweds is necessary.
Estate Planning for Newlyweds: Do Married Couples Need an Estate Plan?
You should have an estate plan in place. If you’re a newly blended family where one or both spouses have children before getting married, it’s even more important to have an estate plan in place.
Washington law outlines how assets and real estate are distributed if you die without crucial documents in place.
If you die without a will or other dispositive documents, the state’s laws of intestacy are what dictate who gets your assets. Your spouse will receive the following:
- 100% share of community estate, which is your community property. If you and your spouse purchase real estate, automobiles or other assets while married, these items will go to your spouse, and
- 50% of the decedent’s separate estate, if decedent is survived by issue, or, if not,
- 75% of the separate estate if the decedent’s parents are still alive or if one or more issue of parents
- 100% of the net separate estate if there are no surviving issue nor issue of parent
Even if your spouse doesn’t speak to their parents and they pass away, the parents may have a percentage of rights to specific assets. Estate planning, if you are married, leaves no doubt as to who receives the assets.
If a person dies after their spouse, the law will split much of the estate among children. However, if you’re in a blended family scenario, you likely never adopted your stepchildren, and this would make them ineligible from the intestate share a biological or adopted child would be eligible to receive.
Anyone who has assets and property that they would like to go to their spouse, children, family or friends can benefit from an estate plan. You may need a simple will or trust.
During your lifetime, important estate planning documents, such as powers of attorney and healthcare directive (or living will) protects you through making sure a trusted person acts on your behalf in case you become incapacitated.
What Types of Estate Planning Documents Should Be in Place for Married Couples?
Married couples protect their property and personal wishes by creating legal documents that allow them to preserve assets, create trusts and so much more. If you already have an estate plan, we highly recommend revisiting it during important life milestones or unexpected events, such as:
- The birth of a child
- The loss of a child
- A divorce
Estate planning for newlyweds without children is still a good option because it prevents potential disagreements from family members, provides directions for your asset transfers and helps you build a life together with peace of mind. Few newly married persons think about what happens in case of an accident and incapacity, but we all know things happen. Even though you are married, you have no legal right to manage your spouse’s financial affairs without a durable power of attorney. You cannot even sell your own home and the court would need to intervene through a court-ordered guardianship if your spouse were to lose capacity.
Over time, your wishes may change, or your assets may grow, and adding to the estate plan is common. One of the most well-known documents that is the foundation of every plan is your will.
Wills
A Will is an essential document that details how your assets will be distributed after your death. If you have children, your Will can also nominate a guardian for your minor children.
Simply put, Wills ensure that your wishes are carried out.
Without one, Washington’s intestacy laws will determine how your property is divided amongst heirs, and the court will determine who will take custody of your children.
A Will can also be used to:
- Preserve assets
- Establish a special needs trust
- Create a trust and appoint a trustee to manage the trust on behalf of your minor children
These are just a few of the many issues a Will can address. An experienced estate planning attorney can help you build a Will that will meet your individual needs and give you peace of mind that your wishes will be carried out.
Trusts
A trust is another vehicle that can be used to manage and distribute assets. Some of the most common trusts include:
- Revocable living trust, which may be revoked at any time during your lifetime. Assets are transferred into the name of the trust, and a trustee is appointed to manage the assets for the benefit of the beneficiary. It is created during your lifetime to protect assets and provide instruction on how the estate is distributed after your death.
- Irrevocable trust, which may not be revoked. The creator of the trust, the trustor, loses ownership and control of the assets. A trust of this type is often used for asset protection and tax mitigation, but it may also be used for Medicaid and Long-Term Care planning purposes.
- Testamentary trust, which is created after the trustor’s death via their will. They are commonly used to manage assets for minor children until they reach a certain age and are then dissolved. Other testamentary trusts can last a lifetime or even for multiple generations.
Other types of trusts may also be relevant for newly married couples. For example, if a spouse receives government benefits, a special needs trust may be created to preserve assets without jeopardizing those benefits.
Durable Power of Attorney
A durable power of attorney is a legal document that grants another person the ability to act on your behalf if you can no longer make decisions yourself.
For example, if you’re involved in a traumatic accident and become incapacitated, the person you appoint as your attorney-in-fact will be able to make medical and financial decisions on your behalf.
You can name your spouse as your attorney-in-fact or another trusted individual. Your spouse has no rights to manage your financial affairs unless you have granted them that authority under your durable power of attorney.
Healthcare Directives
A healthcare directive provides clear instructions about the end-of-life care you wish to receive or not receive. Outlining your wishes for life-sustaining treatments or procedures eliminates uncertainty and stress for family members and your attorney-in-fact/health care agent.
These are just a few of the documents you will need for estate planning for newlyweds.
How Will Our Team Help Draft an Estate Plan That Takes Care of Your Spouse Should the Unthinkable Happen?
A new marriage marks the start of a new chapter in your life. While no one wants to think about the end when they are only at the beginning of this new life, it’s important to take steps to plan for the unthinkable now while you’re still healthy.
At ELG Estate Planning, we assist clients with the estate planning process. We’ll take the time to understand your goals and create a plan based on your estate planning for newlyweds’ needs.
Contact us if you’re interested in estate planning if you are married – newlywed or not – at one of our offices in Spokane, Tri-Cities or Seattle.
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