Every February married couples express their love for each other on Valentine’s Day. In estate planning, however, saying “I love you” might not be the best approach to take for your spouse.
You have probably heard of the term “simple will.” It normally refers to a will made by a married person that leaves his or her entire estate to the spouse. Both spouses often have these wills drawn up at the same time and have agreed that the surviving spouse will eventually leave everything to their children or some other agreed upon heirs.
Estate planning attorneys privately sometimes sarcastically call these “I love you wills.”
The reason for the sarcasm is not cynicism about loving a spouse so much that you want to leave him or her everything. It is because a simple will might not be the best way to express your love for a spouse in an estate plan as Wealth Management explains in “A Better Way To Say ‘I Love You’.”
The problem is that simple wills have many potential difficulties that people have not thoroughly thought through. Because these are wills and not trusts, they will ordinarily have to go through probate. They can also have unintended tax and financial consequences for the surviving spouse. Finally, there is no way to prevent the survivor from later changing his or her mind and doing something different.
Instead of simple wills, estate planning attorneys often suggest lifetime beneficiary trusts. These trusts let the surviving spouse use any assets while alive, with any remaining assets later going to other beneficiaries.
If you have questions about wills and trusts and whether you should consider something other than a simple will, talk to an estate planning attorney.
Reference: Wealth Management (Feb. 14, 2017) “A Better Way To Say ‘I Love You’.”