We know, estate planning is the furthest thing from a newlywed’s mind, and it’s not much different for those who’ve been married or partnered for years -- you’ve got more pressing things going on, right? But if you’re not on the same page with your spouse, and how you see the future, it can become a pressing issue.
The leading causes of divorce in America include infidelity, lack of intimacy, communication, money, and addiction. Planning can’t help with cheating, rekindling the spark, or addiction, but communication issues and foreseeable money issues can be mitigated (2 out of 5 ain't bad).
Decisions like who would raise your children if you and your spouse couldn’t, do you have the right insurance in place, and have you shared information about the finances, home, and digital accounts? All of these things can provide peace of mind in a marriage.
Breathe Easy, It’s Not All Bad
It’s not all doom and gloom because it seems that the divorce rate in the United States is declining. If you dig deeper, the arguments around money that cause most divorces aren’t simply over a lack of money -- it involves more complex reasons like disagreements over saving or spending habits, issues with power dynamics due to different incomes, one spouse controlling all of the finances, and general financial instability. Creating an estate plan, or simply getting organized and sharing information with your spouse or partner, will open up new lines of communication regarding your larger personal and financial obligations.
Check out our tips below so you and your spouse are on the right planning track. Estate planning, which sounds much fancier than it is, is about communication and responsibility and doesn’t have to be difficult. Plus, it could have some positive side effects in other areas of your relationship.
Think About The Kids
Who would raise your children if you weren’t around to do it? This is a very difficult question to answer, especially if you and the other parent aren’t on the same page. It’s common for parents to be in agreement about almost everything regarding child care and never finalize their Wills because they can’t agree on a guardian. Unless there’s a clear and obvious choice, it often becomes a battle between “my family vs. your family.” There’s a possibility neither have family members who’d make a good guardian, and you’ll have to decide on a close family friend.
You need to choose one individual as the primary guardian, and an alternate in case that person can’t fulfill the duties required. Planning for a guardian can ensure your wishes are carried out according to your desires. If you’re having a hard time choosing someone, start eliminating people who you wouldn’t want to raise your kids. The same way it can be tough to pick a name for a newborn, you eventually did it. Your kids aren’t walking around nameless and they shouldn’t be guardianless either.
If you never settle on a guardian, or are resentful because you felt forced to settle on a guardian you didn’t want, this could lead to other problems in the future. How many times have you gotten into an argument about one thing when it was really about something else? This could be one of those things. “Why didn’t I put gas in the car? Maybe it’s because you think your horrible evil brother could raise our kids. That’s why!”
You name a guardian in your Will, which means you need to create a Will, which is the easy part once you’ve settled on a guardian. Without a Will it’s up to the court to decide how to distribute your assets and whom to name as custodians of your children -- and there’s a good chance it could be one of those people you wouldn’t want raising your kids. If you take initiative, decide on a guardian (and alternate guardian), and complete your Will, it’s one less thing to think about.
Think About The Money
Just because you’re married doesn’t mean you have to share everything. It’s completely normal to have your own bank account or credit card. It can even be romantic, like when you buy surprise gifts and not have it spoiled because your spouse saw the charge on a card. But if something happened to you, would your spouse be able to easily access that account?
This is why you should give your spouse or partner Joint Tenancy with Rights Of Survivorship (JTWROS) or name them as the Transfer on Death beneficiary for every bank or investment account and piece of valuable property that’s only in your name. This prevents these assets from having to pass through probate court, which should be avoided as much as possible.
Another point of contention might be if your home is only in one of your names. If the person whose name appears on the deed dies, the other person has to run a gauntlet to become the rightful owner, even if they’ve lived there for 50 years. If you don’t want to co-own your home with your spouse or partner (perhaps there’s a financial or tax reason), you should look into creating a Trust, putting your house in that Trust, and naming your spouse or partner as a trustee and beneficiary to ensure the house goes directly to them if the homeowner dies without having to step foot into a courtroom.
This solution is more complicated and costly -- you’ll need to hire an estate attorney or financial professional so it’s done correctly -- but it’ll offer your spouse peace of mind knowing they’ll have a place to live, or a place to sell if they want to downsize, without spending a fortune on legal fees.
Married couples are a team that depend on each other socially, emotionally, and financially. It’s essential to consider purchasing Life Insurance to provide a financial safety net in case the primary earner dies. You’ll have to decide on Term Life Insurance (more affordable but it expires after a set time period) or Whole Life / Permanent Life Insurance (more expensive but never expires), as well as the amount of coverage, which depends on your age, health, and how much you can afford.
One way to estimate how much insurance you’ll need is to take a quick financial inventory of how much money you make and have (income earnings, savings, investments, valuable property) compared with all your major expenses (monthly spending, mortgage/loans, debts). If you have children you’ll want to factor in future expenses such as college or care if they have special needs. This inventory can provide transparency and help a couple get on the same financial page, perhaps leading to more peaceful conversations about money and better spending habits.
Even if you’re not married you can name anyone as the beneficiary on a Life Insurance policy, which includes partners, friends, and charities or organizations.
Think About Health
You’ve probably told your spouse what you’d want done if you were in a coma and connected to machines with no chance of recovery. Probably not on the first date, but at some point. Have you gotten it in writing?
An Advance Directive states what treatments you want done in a medical emergency, and who should be making decisions on your behalf. If you’re too afraid to talk about this topic, which is understandable since it’s not the most pleasant of dinner conversations, it can become a point of contention. You’re leaving your spouse holding the bag if you experience a medical emergency. They might have to decide whether you live or die, and this will not only weigh heavy on your spouse but also your kids, in-laws, and close friends.
You may have had the conversation but never got it in writing, which would be fine if everyone in your family got along perfectly. Perhaps one of your grown children with different views than you and your spouse, or an in-law you didn’t get along with too well, will think you acted hastily. If you have it in writing then they’ll know these aren’t your views but the views of your spouse and you’re speaking on their behalf out of love and compassion.
Think About All The Other Stuff That Can Drive A Person Crazy
While we should value a certain degree of privacy in our relationships (even in marriage) it’s important to consider the value of sharing accounts as well as passwords. In the event of an emergency or unexpected death there will be a large amount of financial and legal details to handle. If the incapciated or deceased was the only person aware of accounts and passwords there can be chaos and confusion, which can be avoided with proper planning.
If you’re keeping your accounts secret from your spouse or partner, ask yourself why. What are you hiding? Maybe you like being in control of certain aspects of your life together, or maybe you’re too busy to share the information because there are more pressing issues in life. What’s the big deal in getting a text twice a week asking what the Netflix password is, or why the hot water heater is making that noise again? Those little things can add up over time. While it might not lead to divorce it can lead to unnecessary bickering and frustration. Plus, if the spouse with all the knowledge wasn’t around to answer that call or text, either temporarily or permanently, it’ll be sad.
If your marriage fails, odds are it won’t be because you didn’t do proper organization and planning. If your marriage lasts the rest of your life then great planning becomes another reason why you loved your spouse so much.