Congratulations on your marriage! It’s an exciting time in your life. But once the honeymoon is over and you’ve merged your households, it’s time to think about the practical matters that arise from sharing your life with someone. No one likes to think about a time when bad things might happen, but preparing ahead can help you protect your new family. In this blog, we’ll talk about some of the most urgent issues you should address.
PROTECT YOUR HOUSING
Unless you’ve lived together for a while, you and your new spouse are probably working out the kinks of sharing a home. While it’s not fun to think about, if only one of you is on the deed, it could make life much more complicated and expensive if one of you passes away. Some solutions include:
- Lady Bird Deed
In Michigan, a lady bird deed is a special form of life estate deed that allows you to pass on your property to your spouse or other heirs automatically upon your death without going through probate. Probate can be a time-consuming and expensive process where the court appoints a trustee to oversee your estate’s distribution. But a lady bird deed allows you to retain the full title to the property for your lifetime and avoid probate after your death. You can still sell or mortgage the property at any time, and the trust protects it from your heir’s creditors.
- Quitclaim Deed
A quitclaim or quitclaim deed is a legal instrument used to transfer an interest in real property. It’s a quick and relatively easy way to add your spouse to the title of your home while you’re both still living.
PROTECT YOUR ASSETS
After getting married, it’s also important to think about what will happen to your assets if one of you passes away. There are a few essential estate planning documents to put in place now.
- Create a Will
A will is part of the backbone of your estate plan, allowing you to determine how the executor will manage and distribute your probate assets after your death. While this is a simple and easy way to declare your wishes for your estate, it doesn’t offer any protection for your assets while you are alive. Moreover, you can’t place restrictions on gifts to your heirs with a will.
- Consider a Living Trust
A revocable living trust is a good way to organize and protect your assets. A living trust allows you to put restrictions or conditions on gifts to your heirs and control how the trust will distribute assets. A trust also allows your assets to go directly to beneficiaries without going through probate. You can even include spendthrift provisions if you want the assets to remain in the trust if an heir’s creditors may be a problem.
A living trust also typically names a successor trustee who can manage your affairs if you become incapacitated. In combination with a will, a living trust is usually the most efficient way to distribute your estate.
PREPARE FOR INCAPACITATION
While it’s not fun to plan for your death, it’s also not fun to think about becoming incapacitated. To protect your family, you should put plans in place if you or your spouse become physically or mentally unable to care for yourselves. To prepare for this, you should put several documents in place:
- Living Will
A living will is a written document expressing your wishes for end of life care, given to your doctors and your family. When your doctor diagnoses you as terminally ill or permanently unconscious and unable to communicate your desires about your care, the living will takes effect.
- Medical Power of Attorney
A medical power of attorney is an advanced directive naming someone to make your medical decisions if you cannot do so. In Michigan, this document is also called a health care surrogate.
- Financial Power of Attorney
A financial power of attorney is another advanced directive that names someone to make financial decisions for you if you become incapacitated. Financial decisions could include paying bills, managing your assets, or running a small business.
PROTECT YOUR CHILDREN
If you have minor children or plan to have children, you should consider how to protect them and provide for them if you and your spouse pass away or become incapacitated. As part of your estate plan, you should name a guardian to care for them and make decisions about their education, health, and lifestyle. You should also name a conservator to make financial decisions for your minor children and manage their assets. You can name both of these people before your children are born.
PROTECT YOUR FAMILY WITH LIFE INSURANCE
As part of your estate planning, you and your spouse should consider purchasing life insurance. Life insurance can give you peace of mind that your spouse or children will be able to pay bills, pay off a mortgage, or finance their education if you pass away. Life insurance proceeds do not pass through probate, meaning they can go directly to your adult heirs. Or life insurance proceeds can fund a trust for your heirs upon your death. However, if your children are minors, the life insurance proceeds will not be released to them directly. Having a Living Trust in place will allow for you to choose who handles the money, how the money is spent, and at what ages your children may receive lump sum payments.
If you’re a newlywed in Michigan considering how to plan for your family’s future, Dallo Estate Planning can help.