Many young couples think that, if they don’t have kids, they don’t need an estate plan. After all, if you die, everything is going to your spouse anyway, right? Not always.
If you are married with no kids, and you do not have an estate plan or prenuptial agreement providing otherwise, the law in New York says that everything you have goes to your spouse. However, your spouse must still go through probate before he or she can get your assets. This is the case even if you have a Last Will and Testament providing that your spouse gets everything.
CHOOSING AN ESTATE PLAN
Remember that there are two sides of estate planning: What happens to your STUFF when you die and who takes care of your SELF when you become incapacitated. With a spouse, your primary goal with your STUFF should be to avoid probate. There are several ways to do this, some better than others. At the very least, we recommend ensuring that your spouse is listed as a joint owner or pay-on-death beneficiary of your assets.
Your primary goal with your SELF should be to ensure your spouse has full authority to make decisions for you in the event you cannot make decisions for yourself and that you have an alternate to make those decisions for you if you spouse is unable. These designations usually come in the form of a Power of Attorney and a Health Care Proxy, which spell out your wishes in the event you are unable to take care of yourself.
Generally speaking, an estate plan for married couples commonly consists of a Living Trust, Last Will and Testament, Powers of Attorney, and a Health Care Proxy, or some combination of those documents. Many couples prefer the benefits of a Living Trust, since it avoids probate for assets titled in the name of the trust, appoints someone to control your assets in the event you can no longer do so, and can be easily amended if you ever have children or wish to change the distribution of your estate.
When properly crafted by a qualified estate planning attorney, these documents can ensure that your spouse can receive your STUFF without having to go through probate after your death and that your spouse (or an alternate representative) can take care of your SELF when you are no longer able to do so.
Regardless of your estate plan, we recommend you write a letter of instruction to your family or representatives, telling them everything they need to know to manage your estate. What subscriptions or services need to be canceled? What bills need to be paid? Where do you keep your assets? What family or friends should they notify of your death? Giving these instructions can make it much easier for your representatives to properly manage your estate after your death, particularly if your spouse does not know much about your family finances, business dealings, etc.
In addition to writing a letter, you should have a family meeting to let your loved ones know the basics of your estate plan and other wishes regarding your estate and your medical care. Consider if your spouse were faced with the decision of whether to take you off of life support; how would your spouse feel? By talking about your decisions and desires with your spouse, you can help them better follow your wishes in the event of your death or incapacity.
If you own a business, you should also create a succession plan to provide for the management of your business affairs after your death. Is the business your family’s primary source of income? If so, do you want to provide for your spouse to continue operating the business? Or do you have a business partner who will continue running it? Whatever the case, it is important to plan for an orderly transition or disposition of your business so your spouse does not lose the value that you created during your lifetime.
Lastly — and this is especially important for Millennials — we highly recommend you create a digital estate plan detailing how you want your online assets disposed of and the information your representatives will need to access those accounts. Depending on the laws in your state, you may need to appoint a separate “digital executor” in your estate plan for this purpose. Contact the experienced attorneys at Melvin & Melvin, PLLC via email or 315-422-1311 to help determine what estate plan best fits your goals and family circumstances.
Read the next section Growing Up Smart: Estate Planning for Millennials Part Three: Married with Children