The loss of a spouse is one of the most emotional experiences you will probably have to go through over the course of your life. The last thing you may wish to think about while you are grieving the loss of a spouse is something as seemingly mundane as updating your estate plan. Failing to do so, however, could lead to some unintended and unwanted consequences. Let’s explore some common changes that you may wish to your estate plan following the death of a spouse.
- Last Will and Testament – when a spouse passes away, you will need to remove your spouse as a beneficiary under the provisions of your Will. You may also need to remove him/her as the Executor of your estate and appoint someone new to the position. Your current Will should include language that accounts for the possibility of a beneficiary predeceasing you; however, knowing that you will be the last spouse to die may change how you want your estate distributed. In addition, your spouse probably left you significant assets that change the make-up of your estate assets.
- Trust Agreement – 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 in light of 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.
- Life Insurance Policies— your spouse is also likely the primary beneficiary of your life insurance policies. Start by reviewing the continuing need for the insurance given the recent passing of your spouse. If you decide to retain the insurance, review and update beneficiaries.
- 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 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.
Please download our FREE estate planning checklist. If you have additional questions or concerns about what needs to be changed following the death of a spouse, contact us at the Northern California Center for Estate Planning & Elder Law by calling (916)-437-3500 or by filling out our online contact form.