Most married couples in America are of modest means, and do not necessarily need complicated estate planning. Their most significant assets including the family home (to the extent it isn’t underwater), life insurance, employee retirement or death benefits, and minor investments in mutual funds, savings accounts, or real estate. Most of these assets are usually held by the spouses in joint tenancy, which means the estate distribution needs of most couples of this type can easily be handled in a fairly simple will. Tax planning may not be required if the total value of the couple’s assets is below the exclusion amount.
The most significant issue for these young families is providing for the protection, support, and upbringing of the minor children if for some reason both spouses died before the children were grown. If only one of the spouses is capable of producing significant income, an additional estate planning need may be to provide for the support of the surviving spouse upon the death of the income-producing spouse. If the couple’s house is underwater, special estate planning considerations apply, especially for the surviving spouse. An attorney should be consulted in this situation.
There are two main estate planning vehicles for couples of this type: either a simple will with a contingent trust or a revocable inter vivos trust. Both types of instruments, if properly drafted and implemented, will provide for the protection of the minor children upon the death of both spouses and, if desired, for the support of the surviving spouse upon the death of the income-producing spouse. The principal advantage of a simple will with a contingent trust is that it is not necessary to incur the expense and inconvenience of transferring the couple’s assets to the trust during their lifetime. The principal advantage of a revocable inter vivos trust is that because their assets have been transferred to the trust prior to death, the expenses and delays of probate are avoided.
Sample wills with contingent trusts and sample revocable inter vivos trusts are included in Argyle’s Estate Planning Package. This package is ideal for small firms or practitioners in small towns wishing to efficiently represent married couples for the purposes of estate planning.
In addition to providing for the financial support of their minor children, most married couples with minor children also wish to name the persons whom they want to be the guardians of their minor children upon the death of both parents. For many couples this is an important aspect of estate planning and it should not be taken lightly by the estate planner. There are certain rules that should be followed which are described in another post. Married persons with minor children should also consider drafting living wills and a durable powers of attorney for health care prepared in case one or both of them should be involved in a serious accident or incur a fatal disease or illness.
Please note: all couples wishing to draft an estate plan should first meet with an attorney.