The Importance of Proper Estate Planning For The Newly Widowed Person

A newly widowed person faces many legal issues that should be addressed in light of the personís changed circumstances. Whatever legal arrangements a person established while their spouse was alive should be revisited and perhaps updated. This article provides a checklist of areas that should be reviewed by any surviving spouse:

1. Estate Planning Arrangements. A newly widowed person should consider whether the following estate planning arrangements are appropriate for them:

 

 

2. Estate Planning Beneficiaries. All of a surviving spouseís beneficiaries named under their Will and Revocable Living Trust should be reviewed. If a personís current legal arrangements do not provide for their current wishes, then those wishes will be frustrated. The legal documents control. You might want to change the beneficiaries you name and the order in which you name them in light of the passing of your spouse. Also, beneficiary designations on your Beneficiary-Designated Property should be done with the same care that you do your other estate planning. You should contact your plan administrators and custodians to determine your present beneficiary designations and should confirm that all of your beneficiary designations (Both Primary Beneficiary and Contingent Beneficiary Designations) on your Insurance Policies, Annuities, IRAs, Investment Accounts, and other Beneficiary-Designated Property provide for the distributions which you desire. Each of your assetsí beneficiary designations will determine how that beneficiary-designated asset will be distributed after your death regardless of what your Will and Revocable Living Trust might say. Your beneficiary designations should be revisited at least annually to ensure that they are consistent with your wishes. In addition, each year you should review your life insurance, long term care insurance, and investment plans with your other advisors to ensure that they continue to meet your goals and objectives.

3. Important Estate Planning Roles. All of the people named in your estate planning documents to fill important estate planning roles (including those named as your first choices and those named in successor/backup roles) should be reviewed and perhaps updated in light of your changed circumstances of losing a spouse. These important roles include the people you have named as your Attorneys-in-Fact under your Durable Power of Attorney for Financial Matters, your Health Care Agents under your Durable Power of Attorney for Health Care, the Executors and Guardians named in your Last Will and Testament, the Trustees named in your Revocable Living Trust, as well as any other applicable roles in your estate plan. Your wishes regarding these important roles may have changed since your estate planning documents were executed. If you do not update your documents to reflect your current wishes, your current wishes will not be followed.

4. Review The Way That You Own Your Assets. You should review the specific way that you now own your assets to ensure proper coordination with your estate planning legal arrangements. Property owned individually (in oneís own name only) by a decedent is probate property and will be distributed according to a personís Will after probate administration. Also, property that you owned as joint tenants with rights of survivorship with your spouse passed to you by operation of law upon your spouseís death, avoided probate, and is now your individual property which would be subject to probate upon your death. Likewise, Beneficiary-Designated Property which passed to you outside of probate upon your spouseís death is now your individual property, and, as such, would be subject to probate upon your death. Thus, you might choose to fund such property into a Revocable Living Trust during your life to avoid having to probate the asset upon your death.

5. Family Communication. Lastly, I encourage you to keep your family informed. While these issues are sometimes difficult to discuss, at some point, all family members should gain some awareness of the financial, medical, and legal arrangements that can affect the entire family.