Losing a spouse can be devastating. It creates a void in many aspects of life. In situations like these, it’s also important to review your estate plan and determine what should be done.
If your spouse has passed, these are the most common estate planning issues to consider:
- Talk with your family. Hopefully families or at least some children come together during these difficult times like these. If they do, use this as an opportunity to talk with them about your estate plan. In particular, consider discussing with the children or people you’ve named in your estate plan about your financial and health care wishes. This will help them be more prepared to effectively step in and make decisions for you. It can also help them anticipate challenges that may come up with your finances or family.
- Update your estate plan. When a spouse passes, it’s not unusual for a trusted child or other family member to become involved in making financial decisions or assisting their parent in that process. This isn’t necessarily because the surviving spouse is no longer able to handle financial decisions. The financial world is very complicated and having a trusted child or other family member help make those decisions can make it a lot less stressful. If this would be helpful in your situation, your estate planning documents likely need to be updated to name that person as a co-trustee and agent under your financial power of attorney. In making these changes, you’ll still able to make your own financial decisions. But, your child or other family member will be able to assist in the process or even make a decision if you’d like them to act for you.
- Implement your estate plan. When a spouse passes, an estate plan may need to be carried out. If you’ve planned to avoid the estate tax, this will entail administering what’s commonly known as a “family trust” and perhaps a “marital trust.” On the other hand, if you’ve planned to protect your assets from Medicaid and long-term care costs, this may involve administering a “supplemental needs trust.” These steps are very important to insure your assets are best protected against the estate tax or long-term care costs.