Your Family’s Long-Term Financial Strategy

If you are married or in a long-term relationship, you and your spouse should discuss your family’s financial plan in the event that either of you dies suddenly or is incapacitated. While having this conversation can be uncomfortable, taking steps such as nominating a guardian for a minor child is more a matter of practical necessity than personal preference.

Your Intended Heirs and Preferred Beneficiaries

Many married women resolve estate planning concerns by naming their spouse as sole heir and beneficiary to their estate. However, without naming secondary heirs or alternate beneficiaries, this approach could leave your family empty-handed if your better half predeceases you.

Your Estate Planning Checklist

Every estate plan is as different as its author and testator. However, at least on paper, most estate plans have similar systems of protection. Your estate plan should include:

A Last Will and Testament

A last will and testament is a legal document that names preferred heirs and instructs the distribution of your probate assets. It also provides an opportunity for parents to name a guardian for any minor children.

An Advance Health Care Directive

An advance health care directive is also known as a living will. It is a legally-enforceable document that nominates a health care surrogate—sometimes termed a health care proxy—who is authorized to make medical decisions on the principal’s behalf, should the principal ever be incapacitated by disease, injury, or old age.

Powers of Attorney

The durable power of attorney permits a trusted third party to make certain financial transactions if, again, you are ever incapacitated. This trusted third party—your attorney-in-fact—is required by law to act in your best interest. They may exercise their power to pay your rent, purchase groceries, or manage an investment retirement account.

Beneficiary Designations

A beneficiary designation is a person or party entitled to receive payment or other benefits from a financial product. Bank accounts, investment accounts, and insurance policies almost always include beneficiary designations.

Estate planning attorneys recommend that women review their beneficiary designations regularly, especially after important life events such as a marriage, divorce, birth, or death.

A Revocable Living Trust

A revocable living trust is a type of legal entity capable of receiving, owning, and managing assets. Revocable living trusts are established during the trustor’s lifetime. So long as the trustor is alive, they typically retain rights of access and use to trust-owned assets. After the original trustor passes away, a nominated successor trustee will administer the trust.

Trusts offer several benefits over conventional wills. They can be conditioned, ensuring that inheritances are used for education, maintenance, or other essential purposes. Additionally, any assets bequeathed through a trust pass outside of probate, preserving the family’s privacy and relieving heirs of the need to travel to court.

Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.