Breaking Down the Legal Aspects of Estate Planning for Newlyweds
As a newlywed couple, you may be overwhelmed with all of the new changes and responsibilities that come with marriage. Amidst all of the excitement, it is important to take a step back and start thinking about the future. One crucial aspect to consider is estate planning.
Estate planning handles how your assets will be distributed after your death or if you are no longer able to. While this topic may not sound particularly exciting, it is essential for protecting your loved ones and preserving your legacy. This article will cover the key legal aspects to keep in mind when it comes to estate planning as newlyweds:
- Why Newlyweds Need Estate Planning
- Key Documents to Include in Your Estate Plan
- Considerations for Newlyweds
- Legal Considerations for Joint Property
- Seeking Professional Advice
- Naming Beneficiaries and Executors
- Health Care Directives and Powers of Attorney
- Tax Implications for Married Couples
- Choosing a Wauwatosa Estate Planning Lawyer
1. Why Newlyweds Need Estate Planning
It is never too early to start thinking about the future and taking steps to protect your loved ones. As a newlywed couple, you likely have many shared assets, such as a home, car, and joint bank accounts. In the event of one spouse’s death or incapacitation, without an estate plan in place, the surviving spouse may face challenges when it comes to accessing and managing these assets.
Additionally, if you both pass away unexpectedly without an estate plan, your assets may be distributed according to state laws instead of your wishes. This can lead to unintended consequences and potential disputes among family members.
2. Key Documents to Include in Your Estate Plan
When it comes to estate planning, there are a few key documents that every newlywed couple should have:
- Wills: A will is a legal document that outlines how you want your assets to be distributed after your death. It also allows you to name guardians for any minor children and specify any final wishes or instructions.
- Trusts: Trusts can be useful for protecting and managing assets, especially if you have significant assets or complex family dynamics. They can also help avoid probate court, which can be time-consuming and costly. You can learn more in our guide Wills vs. Trusts.
- Power of Attorney: This legal document designates someone to make financial and legal decisions on your behalf if you become incapacitated.
- Advance Directive: Also known as a living will, this document outlines your wishes for medical care and end-of-life decisions in the event that you are unable to communicate them yourself.
3. Considerations for Newlyweds
As newlyweds, there are a few specific considerations to keep in mind when it comes to estate planning:
- Name Your Beneficiaries: Make sure to update beneficiaries on all of your accounts, including life insurance policies and retirement plans. This ensures that your assets will go directly to the designated individuals without the need for probate court.
- Review Titling of Assets: The way you hold title to joint assets can have a significant impact on how they are distributed in the event of one spouse’s death. Consider consulting with an attorney to determine the best way to title your assets for your specific situation.
- Update Your Estate Plan as Needed: As your life and circumstances change, it is important to review and update your estate plan accordingly. This may include adding or removing beneficiaries, updating wills and trusts, and designating new powers of attorney.
4. Legal Considerations for Joint Property
As a newlywed couple, you may have joint property or assets. It is important to understand the legal implications of this joint ownership and how it may affect your estate plan.
- Tenancy by the Entirety: In some states, married couples can hold real estate as “tenants by the entirety,” which provides protection from creditors and potential lawsuits. This type of ownership also allows for automatic transfer of ownership to the surviving spouse upon death.
- Community Property States: Community property states consider all assets acquired during the marriage as jointly owned, regardless of whose name appears on the title. This joint ownership grants both spouses equal rights to these assets, meaning they will be divided equally if the marriage ends in divorce or upon the death of a spouse.
5. Seeking Professional Advice
Estate planning can be a complex and emotional process, especially for newlyweds who may be facing these decisions for the first time. It is important to seek professional advice from an experienced estate planning attorney who can guide you through the process and ensure that your wishes are legally protected.
6. Naming Beneficiaries and Executors
When creating your estate plan, it is important to carefully consider who you want to name as beneficiaries and executors. Beneficiaries are the individuals or organizations who will receive your assets after your death, while an executor is responsible for managing and distributing your assets according to your wishes. The duties of an executor include critical tasks like taking inventory of the estate, paying debts, distributing assets to heirs and more.
As newlyweds, you may need to update these designations from previous plans. It is important to choose individuals who you trust and who have the necessary skills to carry out their responsibilities. You may also want to consider naming alternate beneficiaries and executors in case something happens to your primary choices.
7. Health Care Directives and Powers of Attorney
In addition to considering assets and beneficiaries, estate planning also involves making decisions about your healthcare and end-of-life care. As a newlywed couple, it is important to discuss these decisions with each other and make sure they are reflected in your estate plan.
Health care directives and powers of attorney allow you to designate someone to make medical decisions on your behalf if you are unable to do so yourself. This ensures that your wishes for medical treatment are known and followed, even if you are unable to communicate them.
8. Tax Implications for Married Couples
Marriage can have significant tax implications, including on your estate plan. As a married couple, you may be able to take advantage of certain tax benefits and exemptions that are not available to single individuals.
For example, spouses can transfer unlimited amounts of money between each other without incurring gift or estate taxes. This can be useful for couples with large estates who want to minimize their tax burden.
9. Choosing a Wauwatosa Estate Planning Lawyer
If you and your spouse are in need of estate planning services, it is important to choose a reputable and experienced estate planning lawyer. Margerie Law has decades of experience helping couples create comprehensive and personalized estate plans that protect their assets and loved ones. Contact us today to schedule a free consultation with a Wauwatosa estate planning lawyer.
By Paul Margerie, Owner of Margerie Law
Paul Margerie of Margerie Law is a knowledgeable and experienced estate planning attorney based in Wauwatosa, WI. With years of experience helping families and individuals with their estate plans, he offers a gentle touch that puts his clients at ease. He understands the sensitive nature of this work and ensures that all details are taken care of with precision and accuracy. He strives to help each client achieve peace of mind that their future is protected by providing personalized advice and creating tailor-made solutions that fit their individual needs.
