You just are married and although estate planning might not be on the top of your list to think about, there are some important and simple steps that you can do to protect yourself and each other in the case of death or incapacity.
A common misconception in estate planning in marriage is that life insurance you receive through your employer will be enough to cover your family upon your death. However, this may be incorrect if a couple wants to have both incomes contribute to the rent or mortgage or to maintain a certain type of lifestyle. If so, you may want to consider additional life insurance. Also if newlyweds are planning to have children in the near future, obtaining additional life insurance may be a smart choice due to the fact that the younger and healthier one is, the insurance premium is much lower. The earlier one gets or adds additional life insurance the more protected their estate will be for themselves and their children. There may be other reasons for life insurance that go beyond ensuring there is sufficient income for your spouse and children in the case of the death of the main wage earner.
Another common misconception is that newlyweds that do not have many assets do not need a basic will because they do not have anything to protect or pass on. Newlywed couples or couples that have been married a long time should have a will that leaves all assets to their spouse if that is what is desired. Although in California there are certain rules for community property, you should not let the default rules in the Probate Code apply to you. The earlier one executes a will, the safer and more protected the estate and also their loved ones will be. A mistake that people typically make is that they believe that wills are only beneficial for their children, and that they do not need to worry about a will if they do not have or plan on having children, but simply put, everyone, married or not or with children or not should have a will executed.
In addition, a will names a guardian for any minor children. This cannot be done in a revocable trust or other document, so it is important if you have minor children that you execute a will that names a guardian for any minor children.
Couples in marriages with prenuptial or postnuptial agreements should execute their wills to mirror the terms and details of their marriage agreements. Wills must reflect the information and details of the contracts because the agreements themselves are not enough to ensure complete protection.
Designate Beneficiaries for Retirement Accounts
A step typically forgotten by newlyweds is to visit their employer’s HR department and to change the beneficiary designations for retirement accounts and for life insurance to the name of their spouse. Many people entrust both of these accounts to their employer but forget to update the information after they get married. Although your retirement account may already be designated to your spouse if no one was selected, you should ensure that your retirement account has the right beneficiaries named. This will ensure that the spouse will have the benefits paid without any delays or problems. This is one of the quick ways that a newlywed couple can start their estate plan.
Owning Property Together
There are a number of options for owning property together, including joint tenancy, community property or tenants in common. If you owned property prior to marriage, there may be considerations whether you want the property to be separate or community. It is important to understand what is separate property and would be considered community property. Further, title should accurately reflect who you think owns the property. If you and your spouse both want to own real estate together, both names should be on title.
Execute a Power of Attorney
Executing a durable power of attorney and advance healthcare directive are crucial steps in estate planning for newlyweds. Without a durable power of attorney, your spouse might not be entitled to make medical, legal or financial decisions. You should also consider having an alternative durable power of attorney in case of both spouses becoming incapacitated.
Estate planning should definitely be a priority for newlyweds and also couples who have been married a long time. It is never too early or too late to plan ones estate and also to make sure that one is receiving all benefits that they are entitled to.
Please contact Attorney Anthony Marinaccio at 818-839-5220 for more information regarding your estate plan.