The average American family has changed a great deal over the last few decades. The assumption that a couple will share finances, tax obligations, and a last name is one that does not necessarily apply in the 21st century. There are more options than ever before to keep your finances, identity, and future plans separate. This sense of independence leads many married people to question: can I make estate planning decisions without involving my spouse? The answer can be more complicated than you might expect.
While it’s certainly possible to begin the estate planning process without your spouse, there are some things to consider. First, it is important to recognize that only assets you solely own can be controlled by your will or trust. Plans you make for certain personal retirement accounts (subject to some restrictions), savings accounts, and individually-owned property can be done without involving a spouse. Any accounts, deeds, or titles in both of your names, however, will need to be handled by both parties.
There are other considerations to take into account, too. For instance, if the planning spouse dies first, items owned by that individual will be distributed according to the plan. Any jointly owned property will go to the surviving spouse automatically. Should the non-planning spouse die first, his or her assets will be distributed according to state law. Depending upon the size of the estate and family circumstances, most, if not all of the assets will be distributed to the surviving spouse. Then, when the planning spouse dies, all of the assets will be distributed according to their estate plan.
This “default” planning can be especially dangerous for blended families. Without proper planning, the children of the first spouse to die may be inadvertently disinherited. For this reason, anyone with kids should involve their partner and co-parent in their estate planning process. Even if you keep other aspects of your lives separate from one another, it’s important to get on the same page about your legacy and the property you’ll leave behind.
There are certain aspects of estate planning that you can handle independently of your spouse. Executing powers of attorney for health care and financial decisions is crucial and can be done without involving your partner. Even if you would like to appoint your spouse as your agent under a financial power of attorney or proxy under a medical power of attorney, you need to properly execute the documents. Just because he or she is your spouse, does not give them the automatic right to make financial and medical decisions on your behalf. Should you become incapacitated, powers of attorney can help ensure that your wishes for your health and wealth are carried out.
Beyond powers of attorney, though, it’s advisable to get your spouse on board with estate planning. To get started, make a list of the assets you and your partner share. While you’re at it, outline individual retirement accounts, insurance policies, and approximate balances – this information will be necessary when meeting with an estate planning attorney. Simply involving your partner in the initial conversations about your joint assets can help ease anxiety surrounding the estate planning process.
We are here to help you with your estate planning needs. Give Davis Schilken, PC a call (303)670-9855 and we can arrange a time to meet to discuss the importance of estate planning and help craft an overall estate plan that will protect everyone involved.