Imagine stepping into the next thrilling chapter of your life as newlyweds, a world filled with shared dreams, laughter, and togetherness. Yet amidst the joy, an unexpected question lingers, one concerning the fate of your assets, your hard-earned financial reserves, in the unfortunate event of something happening to you. You might presume that by simply saying ‘I do’, your wealth naturally passes to your spouse. However, the reality can often be more complex.
Here in Kentucky, the law tells a different story. Without an estate plan established early into your marriage, you might unknowingly set your spouse on a path to share your assets with other family members. It’s an unintended consequence, surely, but a real one nonetheless. Your financial legacy and how it’s distributed should be a matter of your own design, not left to chance or the state’s default rules. That’s why we can’t stress enough the importance of creating an estate plan soon after tying the knot.
What Newlyweds Should Include in an Estate Plan
By creating an estate plan with the help of an experienced attorney, you can make sure your assets pass to the people that you choose. In addition, estate planning can minimize any potential income, gift, and estate taxes. If you currently have children, you will want to make an estate plan to decide who would get custody of your children if something should happen to you and/or your spouse.
In order to avoid the Court having to make this determination, it is important to have an estate plan in place. An estate plan would include the following documents:
Last Will and Testament, Including Guardianship Provisions
The most basic estate planning document is a Last Will and Testament (“Will”). In Kentucky, if you die without a will (known as “intestacy”), your spouse will inherit your property under a law called “dower and courtesy.” This usually means that your spouse inherits 1/2 of your intestate property. The rest of your property passes to your descendants, parents, or siblings.
In writing your will, you will state your wishes for your property and where you would like your minor children to go if you should pass away. You may also want to include a testamentary trust to appoint a trustee to manage the inheritance your children receive until they reach adulthood. You will need to be at least 18 years old and of sound mind at the time you create your will.
You may also want a trust to be part of your estate plan. By creating a living trust, you can help ensure that you will be able to pass on your estate to your heirs. Setting up a living trust in Kentucky makes sense, especially because you will be able to avoid a lengthy and potentially costly probate. You will need to identify what assets should go into your trust. In addition to being able to avoid probate, there are several other reasons and options for setting up a trust. Certain trusts can also result in tax advantages both for the donor and the beneficiary, such as “life insurance” trusts. Other trusts may be used to protect property from creditors or to help the donor qualify for Medicaid.
Durable Power of Attorney
The next most important document is a durable power of attorney. A durable power of attorney allows a person you appoint to act in your place for financial purposes in the event of your incapacity. Even your spouse would not have the authority to make critical financial decisions without this document. For example, if you have a retirement account or IRA, your spouse cannot withdraw money from the account or deposit money into it unless you have given him/her legal authority to do so.
If you do not have a durable power of attorney and you become disabled or are just unable to manage your affairs for a length of time, this could place a great burden on your family since they would have to have the Court intervene to figure out how to handle your affairs.
Health Care Proxy
Similar to a durable power of attorney, a healthcare proxy appoints an agent to make healthcare decisions for you when you can’t do so for yourself, whether permanently or temporarily. Your healthcare proxy will act as your legal stand-in for all medical decisions and this person will be responsible for ensuring that all of your wishes regarding your medical care are met.
An Advance Directive is a legal document that spells out all of your wishes regarding your medical care if a time comes in which you can no longer be responsible for your own medical decisions, and you are incapable of speaking up for yourself. Your Advance Directive essentially gives you the opportunity to write down your instructions in a legally binding document regarding medical intervention and end-of-life preferences.
When you create a living will, you will be able to leave instructions regarding your medical care if you become incapacitated. The Kentucky Living Will Directive Act of 1994 ensures that citizens have the right to make decisions regarding their medical care, including the right to refuse or accept treatment. Anybody in Kentucky who is lucid and over the age of 18 can create a Living Will.
The distinction between a living will and an advance directive is that an advance directive refers to any legal form guiding your future medical care, and living wills refer to specific documents that shape end-of-life treatment. Not all advance directives are living wills, but all living wills are advance directives.
Contact Our Shelbyville Estate Planning Attorneys for Assistance
In summary, once you get married, you will want to be proactive and find the right attorney who can help you navigate your estate planning needs. Berkley Oliver has highly qualified, experienced attorneys in the estate planning area who can highly serve your needs. If you need assistance with your estate plan, do not hesitate in contacting our knowledgeable team of attorneys.