From 'I Do' to 'What If': Estate Planning Must-Do's for Newlyweds - Part 2

This week, we’re continuing the conversation with three more estate planning must-do’s for newlyweds.

04 | A Living Trust

With a trust, no court involvement is needed, and you can set parameters for how you want your assets distributed over a predetermined amount of time.

For example, if you have children or plan to, you can ensure the assets are safeguarded in the trust until your children reach a certain age. If you have children from a prior relationship, you can also make sure that your new spouse is financially supported by your assets during their lifetime but that your remaining assets will be returned to your children after your new spouse’s death instead of going to your spouse’s side of the family.

Having a trust hold your children’s inheritance can also help eliminate conflict between step-siblings and between your children and your spouse. Even if your children are adults, leaving their inheritance in a trust can help avoid family conflict and provide them with a lifetime of asset protection from creditors and lawsuits.

Finally, using a trust as the main vehicle to distribute your assets during your incapacity and after your death allows you to design a custom plan for what happens to your assets far into the future, ensuring that the goals you have for your loved ones are nourished and that your assets are carefully managed and protected even after you’re gone. You can do this by creating contingencies and incentives in your trust that encourage your heirs to behave in certain ways. For example, for your sibling to receive their inheritance, you could require that they seek drug counseling first, or that your children pursue a course of study before receiving a distribution of income from the trust.

05 | A Will

A will allows you to designate who should receive any assets of yours that aren’t already included in your trust or directed by beneficiary designations. Ideally, your trust will include all of your assets. But if you forget to add an asset to your trust, a will ensures that the forgotten asset is “poured over” into your trust and included under its terms for how you want your assets to be distributed and managed.

If you don’t have a trust, your will designates who will receive your assets through the court probate process. Your will may also direct any charitable donations you want to make and can be used to create a trust upon your death if the circumstances call for it- such as if one of your heirs is disabled at the time of your death.

Even if you don’t think you need a will because you don't have many assets or have other estate planning pieces in place, having a will as a backup or “pour-over” tool is an essential part of your estate plan. Plus, depending on state law and whether or not you have children, your assets may not get divided according to your wishes if you don’t have a will, so it’s always a good idea to create one (or update your old one) when you get married.

06 | Legal Guardians for Your Minor Children

Guardians are people legally named to care for your children in the event that you or your spouse die or become incapacitated.

To make sure your children are never left in the care of strangers, it’s crucial to name both long-term and short-term legal guardians for your kids. That way, someone you trust will always have the authority to be with your children during a short-term emergency or a long-term situation.

Don’t assume that just because you have named godparents or have grandparents living nearby that they will automatically have the authority to care for your children if you can’t. The only way to ensure that your children are cared for by the people you would want is to name guardians in a legal document. Otherwise, you risk creating needless conflict between family members and a potentially long, expensive court process for your loved ones.

Planning for a Lifetime of Happiness

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AB Law, PLLC is a full-service business law and estate planning firm that serves clients throughout Texas. All consultations are free and no question is too silly, ridiculous, or complex. https://calendly.com/ablawpllc www.ab-firm.com