Don’t assume your estate will automatically go to your spouse when you die. If you don’t have an estate plan, your spouse may have to share your estate with other family members as directed and controlled by the law in your state.
If you die without an estate plan, the state will decide where your assets go and you will no longer have control to do so. If you are married and die without a Will, most states only award one-third to one-half of your estate to the benefit of your surviving spouse, with the rest divided among your children (if any) or, if you don't have children, to other living relatives such as parents or siblings. This can have a detrimental effect on your surviving spouse's ability to make ends meet in the future.
In addition, without an estate plan, you need to worry about what could happen if you become incapacitated in the future. While your spouse may be able to access joint bank accounts and make health care decisions for you, what happens if something happens to your spouse? It is important to have a back-up person in place and to ensure you have a power of attorney authorizing all necessary powers be taken on your behhalf.
It is important to make sure you have estate planning documents in place.
You may also want to consider including a trust as part of your estate plan. It permits you to name someone to manage your financial affairs under the terms of the document, called the Trustee. This allows them to seamlessly take over in the event of your incapacity or death. Trusts have many options for how they can be structured and what happens with your property after your death. There are several different reasons for setting up a trust. The most common one is to avoid probate. If you establish a revocable living trust that terminates when you die, any property in the trust passes immediately to the beneficiaries. This can save your beneficiaries time and money. Certain trusts can also result in tax advantages both for the creator of the trust and the trust beneficiaries. These could be “credit shelter” or “life insurance” trusts. Other trusts may be used to protect property from creditors, to help the creator of the trust qualify for Medicaid, or to control distribution of assets over a prolonged period of time to underaged children.
The next most important document is a durable power of attorney. A power of attorney allows a person you appoint — your “attorney-in-fact” or “agent” — to act in your place for financial purposes if and when you ever become incapacitated. Without it, if you become disabled or even unable to manage your affairs for a period of time, your finances could become disordered and your bills not paid. This would place a greater burden on you and your family. For instance, without a power of attorney, your family might have to go to court to seek the appointment of a conservator to manage your financial resources, which takes time and money, all of which can be avoided with the use of a simple power of attorney.
Similar to a durable power of attorney, a health care proxy appoints an agent to make health care decisions for you when you can't do so for yourself, whether permanently or temporarily. Again, without this document in place, your family members might be forced to go to court to be appointed guardian. Include a medical directive to guide your agent in making decisions that best match your wishes.
Consult with The Jaeger Firm, PLLC, at (859) 342-4500 to make sure you have all the estate planning documents you need.