Estate Planning Isn’t About Taxes. And Everyone Who Is Married And Everyone With Children Needs To Plan
By Mark Powell
Once you get married, your spouse moves to the top of the list of people who should manage your assets and make health care decisions if you can’t. But, again, it’s best not to rely on default rules. Update your health care power of attorney and your general power of attorney so your decisions are clear so your spouse and your parents don’t end up locking horns. And think very carefully about how you take title to assets after you’re married. It’s incredibly easy to take title jointly because that means the survivor automatically inherits the asset if one spouse dies. But joint ownership gives the survivor absolute control over where assets go after his or her death. If you want assets to pass to specific people after your spouse’s death, then get advice about establishing a trust.
Having kids is a great joy, but nothing else is as good at making you feel the responsibility of adulthood. You now have the task of deciding who will raise the little butterballs if something happens to both parents while they are young. It’s time to add guardian nominations to your will. Although parents often struggle with this decision, the choice is often easier than expected. If you ask each of the new parents to write down the list of possible guardians, nine times out of ten the lists will contain the same group of people. Narrowing down to the top one or two choices seems daunting, but the job gets easier if you shift your focus to the kids of the potential guardians. Once you realize that a couple of your choices have not only made it onto your list but they’ve raised kids you’d like to be role models for your kids, then the choice becomes pretty clear. As part of the same exercise, you need to decide who should manage the assets you’ll leave to your kids, and you’ll almost certainly want to establish a trust so you can give instructions about how those assets should be used to support your kids while they are young. Keep in mind that these can be different people. You can choose one person to raise your kids and someone else to manage assets for them.
So remember – estate planning isn’t about taxes. It’s about making decisions about your life instead of relying on default rules written by a team of legislators. And it’s about putting the people you trust in charge instead of letting someone else (like a judge or a doctor) take over. In the end, it’s about staying in control.