If you just celebrated a summer or early fall wedding, then now is the perfect time to start working on an estate plan.
Although you may think that settling into a home together or finding a place for all your new registry items may be more important than an estate plan, right now is the perfect time because, as newlyweds, you've likely just done a working inventory of your possessions—as you've figured out how to consolidate two households into one. You've already been working on the new banking and shared responsibility of bills and taxes and so forth.
Use that momentum and hard work as a leapfrog into planning for your future that way when the next step of your life comes along – a home, kids, or even just a puppy – you’ll be much more prepared to tackle that stage together.
But we don’t own that much.
Even if you have few assets, you have more than you think. Still, putting together a will or a trust probably is very straightforward at this point, since you just did that accounting of your collective assets.
You may have heard of state laws that give your property to a spouse if you don't have a will. These laws—known as intestacy laws—vary by state and can sometimes have results you wouldn’t expect. And, intestacy requires your estate going to probate—a court proceeding that can take months, even years, to resolve. A basic estate plan can avoid this process and delay and will give you peace of mind knowing loved ones are taken care of, if anything should happen.
We’ll do it when we buy a house or have kids.
You can actually plan now for property you don’t even own yet (i.e. a house you may buy some day) and you can even make provisions for future children. Once you have that initial plan in place, you can easily update it as your circumstances and needs change. If you do already have a sizable amount of assets then estate planning may lead to tax benefits, now and in the future. And if you already have children or are combining families, rethinking your wills and estate plan is critical to ensuring your wishes are carried out to the right individuals.
My spouse will just make a decision if there’s an emergency.
That may or may not be true depending on how you have your power of attorney set up. In the U.S., a power of attorney (POA) is a legal document that designates someone else (often a spouse) to make financial and other decisions on your behalf. In the financial realm, a POA can sign contracts, file lawsuits on your behalf, and more. Depending on the exact language, you can grant the POA broad powers, or something more limited to an issue or situation.
One specific form of POA is in effect only if you are unable to make decisions on your own—such as an emergency or illness. And you can have that type of POA for both the financial side of things, as well as one relating to your medical care. You may also designate different people to be your financial POA and medical POA. One important thing to discuss and plan for is who would make decisions on your behalf if both of you were to be incapacitated. This is a backup POA and is a good thing to decide early on.
I’m sure my spouse will know how I want to be cared for.
Once again, not necessarily. It’s important to have these conversations about any wishes you have regarding resuscitation, life support and elder care. You should also prepare an advanced directive (also known as a living will). This is a document that makes clear the kinds of medical interventions you'd prefer if you're unable to make decisions for yourself. In some ways, think of this as an emotional insurance policy: You make decisions now, so the people you love won't have to. This can also make it easier for your spouse to make decisions if necessary, as long as you name them as a medical decision maker.
My kids have grandparents and godparents, they don’t need a legal guardian.
If you don't yet have kids but want them someday, realize that an estate plan is essential for families with children. The state statute providing assets for a spouse will probably also include some inheritance for children. However, when it comes to guardianship, you need a will to designate caregivers for the children, should something happen to both parents. Without a will, the court decides on the children's caregiver, and the court may select someone you don’t want.
As you start your new life together, one of the best ways to begin is by planning for the future, and whatever it may bring. We've been helping families of all ages and kinds for decades, and we'd love to help you put together your custom plan for your life together.