When you get married or start a family, you have to think about your responsibilities to the other people in your household. As a caregiver or wage-earner, you likely contribute a lot to the family, which means that your death or medical incapacitation would lead to serious issues for the whole family.
You and your spouse may want to create an estate plan to protect each other, yourselves and any children that you share. When you go about creating those estate plans, it’s important that you avoid some of the most common mistakes that couples make.
Creating documents that contradict each other
Perhaps the most common mistake people make when creating an estate plan with their spouses that they add to their existing documents without updating or redacting their existing paperwork.
For example, after your wedding, you and your spouse might draft a new estate plan and a will that handles all of your property. You may talk about your life insurance in the will, but the insurance policy may have a different beneficiary listed. If you don’t update or replace your separate documents when creating a plan for the two of you, there could be a big conflict later.
Naming the other spouse for crucial roles
Your spouse typically has access to most of your assets and a say in your medical care if you aren’t able to speak on your own behalf. Given that your spouse already has theoretical authority in these areas, naming them as your medical agent or the person who will handle your financial matters in a power of attorney wouldn’t be the most efficient solution.
Powers of attorney can help take the pressure off of your spouse in an emergency by naming someone else. When you name someone other than your spouse, you ensure the powers of attorney will still protect you if your spouse gets hurt or dies at the same time that you get hurt.
Failing to preserve the inheritance for their children
Naming your children as the direct beneficiary of your estate only makes sense when they are adults. Until they turn eighteen, they will not have control over whatever resources you leave to them.
Couples that have children may want to create a trust so that assets remain protected if they die. They also need to make a point of choosing a guardian and discussing that choice with the individual, as otherwise the children could end up placed with a stranger instead of someone they know.
Avoiding the most common estate planning mistakes can help couples create documents that will give them protection and peace of mind in an unpredictable world.