Estate planning after your spouse has passed away.
The death of a spouse is an emotional event and a major life change that requires an update to your estate plan or the creation of an estate plan to ensure someone will be able to assist you if you are unable to make your own decisions and to provide instruction on the disbursement of your property upon your passing.
Important steps to consider
- Give yourself time to mourn the loss of your loved one. Most financial decisions do not need to happen immediately. Take time making financial decisions and major decisions in general unless necessary for the funeral/burial.
- Meet with a probate attorney to determine if a probate case will be necessary depending on your spouse’s estate plan. This step might be especially important if your spouse had a Will based estate plan, did not have an estate plan, or depending on how assets were titled. It is good to have this meeting no more than six months after your spouse’s passing.
- If your spouse had an estate plan, check in with the estate planning attorney to determine if there are any timelines to be aware of when considering tax issues. It is good to have this meeting within the first six months after your spouse’s passing.
- If your spouse created an estate plan and there could be tax issues pertaining to portability of the martial exclusion, talk with the estate planning attorney before transferring or rolling over assets with your financial advisor.
Your estate plan needs a review. You will want to review your current estate planning documents and discuss necessary changes with your attorney. If you do not have an estate plan, it is important you create one.
A Power of Attorney allows your agent (attorney-in-fact) that you named to deal with financial institutions, government agencies, creditors, or work with professional advisors to ensure your financial matters are handled. This could be during a time you are unwell or when you need someone to step in and help with daily matters while you are travelling or unable to handle things on your own at that time.
If you do not have a power of attorney, you will not have anyone to help you or make decisions if you are incapacitated. Family will be limited in what they can handle financially on your behalf. Eventually, someone will need to file a court case requesting a guardian be appointed to ensure your best interests are looked after and deal with financial matters.
A Medical Power of Attorney allows your agent (attorney-in-fact) to interact with your medical providers and help make medical decisions. Again, this could be when you are unwell or need someone to help deal with a provider’s office.
A Living Will allows you to express your end of life wishes, so medical providers can follow your directions and not have to wait for a court order or hospital committee to intervene. A Living Will can save loved ones from trying to guess your wishes and avoid arguments at a difficult time.
When it comes to transferring your property, you will want to consider a Last Will & Testament or Revocable Living Trust. If you already have a Will or Trust in place, now is the time to review these documents and beneficiary designations. These documents let the court or loved ones know who you intended to receive your property. You get to decide if loved ones or a favorite charity will receive property.
If you do not have a Will or Trust, your property will be distributed according to the state of Kansas or Missouri intestacy laws. Instead of leaving your property to chance, your estate plan will ensure your property goes to who you want and not who lawmakers decided.
A Last Will & Testament allows you to state who you want your property to go to at the time of your death. You can make specific and general gifts to family and friends. If your property is distributed under your Will, a probate case will be opened with the court to facilitate the transfer of property.
A Revocable Living Trust will allow you to transfer your property outside of probate and can protect you in case of incapacity. If you and your spouse created a joint trust, now is the time to review to begin any administration of the trust.
Review your beneficiary designations on bank accounts, retirement accounts, brokerage accounts, life insurance, etc.
Take the steps to protect yourself and maintain family harmony. Your comprehensive estate plan will allow you to decide who receives property, how they will receive it and when. You will also have someone you trust to speak for you if you are unable to speak for yourself or need assistance with financial and medical decisions. If you have minor children, you will want to ensure the proper steps are taken so your minor children will not inherit property directly. You taking the time to create your estate plan is a gift to your loved ones.