There are many ways to express love for your special Valentine. While roses and chocolate are always a good standby, estate planning can also be from the heart. An "I Love You" will is a common type of will that is used by estate planning attorneys for married couples.
What is an "I Love You" will?
"I Love You" wills are basically a set of wills in which each spouse leaves everything they own at their death to the surviving spouse. Their wills would also have reciprocal provisions regarding eventual distribution of their estates. This type of planning is used by many married couples when their goals align and they do not have complicating situations.
This is a common estate plan for many married couples. Sometimes, there might be other considerations, though.
When "I Love You" wills are not enough.
For some married couples, this straightforward estate plan is not quite right for their situation. In some second marriage situations couples choose to use trusts for their respective estates. The trust then pays income to the surviving spouse, but the surviving spouse does not have the ability to change the eventual distribution of the trust estate. Another situation when couples need more than the straightforward "I Love You" will is when the total marital estate is likely to exceed the estate tax exemptions. Minnesota's estate tax exemption is $3 million in 2020. This means that a married couple may be subject to Minnesota estate tax if their combined estates are over $3 million. A properly drafted estate plan, and through the use of a trust, can help minimize or eliminate this tax.
Even when an "I Love You" will is a good fit, any assets passing under the will are subject to the probate process and subject to public record. It is important to remember that eventually the second spouse will die, so we need to plan for how the assets will go the children. Couples concerned with avoiding probate can accomplish the same objectives by using trusts instead of wills.
Whether using wills or trusts, there are some definite benefits of going through the estate planning process with your sweetheart.
Some benefits include:
1. Good Communication. Some say it is the key to a strong relationship. Talking with your spouse about how you want your estate distributed, identifying what is important, and discussing who you trust to be in charge when you are gone are all aspects of the estate planning process. Formalizing these wishes in your wills or trusts shows you and your spouse are able to come to an agreement about some critical decisions.
2. Remove Uncertainty and Reduce Conflict. When you and your spouse have determined how you want your estates settled, it can remove any questions of doubt about inheritance. If the couple is part of a blended family, each spouse is then better equipped to discuss their estate plan with their children. Setting forth your wishes in your estate plan also takes the guesswork and potential conflict out of who should help administer the estate when the time comes.
3. Protect Your Children. Through an estate plan, you can protect your minor children in the event both you and your spouse are gone. Without advanced planning, children can inherit the entire estate as young as age 18. By using trusts for minor children, you can protect them by delaying their inheritance until they reach an age of maturity, such as age 25, 30, or 35. You can also name the person you would want to act as guardian, giving you a say in this decision if you are no longer living.
3. Peace of Mind. In addition to naming people to manage your estate when you're gone, a comprehensive estate plan also includes an advanced directive and power of attorney. The health care directive is especially important, not only for you to ensure your healthcare wishes and goals are followed, but for the person making the difficult health care decision for you. Knowing your wishes are being followed can alleviate any guilt your loved one may have about the decision. Once you complete your documents, you will have the added benefit of knowing you completed this financial milestone.
Ready to complete your estate plan? Call (507) 288-5567 to schedule an appointment or send us an email on our Contact page.
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