For my clients, the loss of a spouse is one of the most emotional experiences they will ever go through. The last thing they usually want to think about while grieving the loss of a spouse is something as seemingly disconnected from their grief as updating their own estate plan. As I often point out, however, failing to update their estate plan could lead to unintended and unwanted consequences down the road.
I encourage anyone dealing with the loss of a loved one, and particularly a spouse, to understand that there is real work to be done to keep life going for themselves after this loss. Updating your own estate plan is an important recognition that your life goes on after this loss, but also, getting your own affairs in order — reducing you worries and knowing you’ve taken care of business — can give you the confidence and space you need to cope with the challenges of life without your spouse. It is never easy, and you don’t need any unnecessary worries.
What Needs to Be Updated?
Because every estate plan is unique, I encourage you to consult with an estate planning attorney to be certain you have made all the necessary updates if you recently lost your spouse. The following components, however, typically need to be reviewed and updated:
- Last Will and Testament – For most people, a Last Will and Testament serves as one of the foundations of their estate plan. When a spouse passes away, you will need to should remove your spouse as a beneficiary and Executor under the provisions of your Will. Consult with your lawyer about who to name as Executor going forward and whether you want to change the provisions for distribution under the Will. Your existing Will likely includes language that accounts for the possibility of your spouse predeceasing you; however, knowing that you will be the last spouse to die may change how you want your estate distributed. Your spouse probably left you significant assets that change the make-up of what you Will might control at your death. Don’t forget, not all of you assets will be controlled by your Will and good planning may involve strategically organizing your affairs to bypass the Will. You and your lawyer should review and address any provisions outside of the Will that control distribution of property.
- Consolidation of Accounts — The occasion of the death of a spouse can be the appropriate time to reduce the number of different accounts you have to simplify your affairs. In doing this you can literally be administering the estate of the first spouse to die and doing the estate planning for the survivor at the same time. Again, work with you estate planning lawyer to be sure the right choices are made .
- Trust Agreement – A revocable living trust is an exceedingly popular addition to the average estate plan. If your plan includes a trust, and you appointed your spouse to be the Trustee of the trust, you may need to amend the trust agreement to appoint a new Trustee. Again, your trust agreement should anticipate the possibility of the need for a successor Trustee; however, it still warrants a review. More importantly, the purpose of the trust should be reviewed considering your spouse’s death. Assets may need to be added to the trust. Terms may need to be updated. You may even find that the need for the trust no longer exists. If you are older at the time of your spouse’s death, it may be that elevating your successor Trustee — perhaps an adult child — to be a Co-Trustee with you under your Living Trust, will make administration of your affairs during a possible incapacity or at your death, easier and more efficient.
- Life Insurance Policies— Always take the occasion of the death of a spouse to review the beneficiary designations on life insurance policies and retirement accounts. If you spouse is named, they should be removed as primary beneficiary and new beneficiaries named in his or her place. In some cases you may conclude that the death of a spouse makes it no longer necessary to maintain the same amount of life insurance.
- Advanced Directive – if you have an advance directive in place you probably named your spouse as your Agent, giving him/her the legal authority to make health care decisions for you if you are unable to make them at some point. This is not a document that you want to terminate; however, you will need to spend some time deciding who you wish to appoint as your Agent now that your spouse is gone.
- Power of Attorney – if you have a comprehensive incapacity plan in place, a Power of Attorney may be part of that plan. If you do not yet have one in place, it is crucial that you create one in light of your spouse’s death. If you named your spouse as your Agent under a POA, that agency authority automatically terminated upon the death of your spouse. You may, however, wish to execute a new durable POA that names an adult child or someone else as your Agent so that someone has the ability to manage your assets in the event you become incapacitated. With your spouse gone, it is considerably less certain who would have the legal right to step in and make decisions and/or control your assets. That, in turn, increases the likelihood of a contentious court battle between adult children or other family members if you ever do become incapacitated. Executing a new durable POA is one way to avoid the likelihood of litigation.
Contact Durham Area Estate Planning Attorneys
If you have additional questions or concerns regarding the importance of updating your estate plan following the loss of a spouse, please contact the Durham estate planning attorneys at Clarity Legal Group by calling us at 919-484-0012 or contact us online.
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