In addition to setting a date, picking a photographer, deciding between tulips or peonies, and finding THE dress, here is something to keep in mind that the bridal magazines leave out: estate planning. Estate planning is the process in which a person arranges the transfer of their assets should that person die. Whether it is a simple Will, a Living Trust, or more complex estate planning, everyone should have proper estate planning in place, especially if they are married! Now that you are starting a family, it is time to start planning ahead for your family.
Did you know that the leading cause of death for young adults is accidents?
This means that even if you are a healthy, indestructible, young adult, you should still have proper estate planning done just in case. Estate planning helps ensure that your loved ones receive your property in the event of your death, prevents fighting between family members, and can save your loved ones a lot of time and money by avoiding probate. Before you are officially married, the assets held in your name do not automatically pass to your future spouse should something happen to you. Without a Will, your assets will pass according to Illinois law to various family members, depending on who your surviving relatives are. In addition, without a Will your assets will end up in probate. Probate is a process in which a court oversees the division of your assets, and it can cost your loved ones thousands of dollars. Once you are married, you still need a Will to ensure that your spouse receives your property. Overall, a Will is the first step to ensuring that your property will pass efficiently to who you want to receive it.
A simple Will does not always keep your property out of probate.
In Illinois, if the assets held in your name at the time of your death are worth more than $100,000 or if you own real estate, your assets will still need to go through probate in order to be transferred to whoever was named in your Will. In order to avoid this, I usually recommend that clients set up a Living Trust. With a Living Trust, you can transfer property held in your personal name to the name of your Trust. You are the beneficiary of the Trust and you have control over your assets throughout your lifetime. In the event of your passing, the Living Trust dictates who will receive your assets just like a Will does. By doing this, you are able to avoid the probate process, and save your loved ones time and money.
Your new family may or may not include children at some point. Everyone who has a child needs to have a will. In the will, you will name a Guardian who you want to take care of your child(ren) in the event of you and your spouse’s death. You will also name a Custodian who will manage property and assets on behalf of your child(ren) until they reach an age when they can legally own property. Parents often name the same person as the Guardian and Custodian, but they also choose to name different people sometimes. Many parents also decide to extend the age when their children can control the assets they inherit from 18 to 25 years old in their wills. Naming custodians and guardians in a Will prevents fighting, uncertainty, and frustration for your loved ones and for your children.
Finally, in addition to creating a Will and possibly a Living Trust, estate planning also includes planning for assets that are not covered by a Will. Assets that are not held in your name at the time of your death do not pass under a Will. For instance, when you are single you might have a parent on one of your bank accounts. Depending on how your bank accounts are titled, it can prevent your spouse from receiving these assets if it is not changed before your death. In addition, you may want to change the beneficiaries of your retirement accounts and life insurance policies to include your spouse because these assets also do not pass under a Will. Therefore, you want to make sure all of your assets are titled properly and beneficiaries are changed so that these assets will pass to your spouse.
While thinking about your death is not the most exciting thing in the world, it needs to be done for your new family to prevent them from going through what can be a lengthy, frustrating, and expensive probate process. Don’t put it off!