It is never too early to jump into estate planning, especially for newlyweds. Starting a life together might not seem like the time to think about what would happen if a spouse were to die or become incapacitated. However, it is the best time to plan an estate to protect the financial and medical preferences of each spouse.
Good Start with an Estate Plan
Creating or updating an estate plan is important whether a couple is just starting out, already established, married previously, or holding numerous investments. The easiest and quickest things to update are existing accounts that have beneficiaries or transfer on death designations. Accounts to update include:
- Bank accounts, including checking and savings
- Investment accounts, including stocks, bonds, mutual funds
- Insurance policies, stand-alone and employer-based policies
- 401(k)s or other retirement accounts, pension accounts, and military benefits
- Health savings accounts
- Existing estate plans or trusts
Spouses should discuss their options and make provisions for a secondary beneficiary if both were to die simultaneously.
Update or Create a Will
In many states, marriage is not just the joining of two people, it is also the joining of all assets that the couple owns. While discussing what should be done with a person’s belongings or assets after he or she dies can be difficult, but it is important. Without a will, assets can end up in probate and may not be given to the people the deceased would have intended. A will designates how assets should be split up if one or both spouses die. It also can provide instructions as to who would care for any existing or future children.
Durable Powers of Attorney
If one spouse were to become incapacitated, the other spouse cannot make financial decisions on the other’s behalf unless a durable power of attorney has been created. It is crucial that this is included in an estate plan to avoid future problems with investments, real estate or businesses that are owned by one or both spouses.
Include Medical Preferences
Lastly, each spouse needs to let their health care preferences be known through an advance medical directive. Many people make their spouses a health care proxy to allow them the power of attorney that is needed to make health care decisions and access medical information.