Joint Trust

Q. Do married couples who own everything jointly need to worry about estate planning?

A. Yes. Everyone should be concerned about estate planning. The tax laws created the unlimited marital deduction in 1981, which alleviated many of the tax concerns for married couples upon the death of the first spouse. Now it is possible to give your spouse an unlimited amount of money during lifetime or upon death, tax-free.

However, if a decedent dies with a will or trust that was executed before September 1981 which expressly provided that the spouse receive the maximum amount of property qualifying for the marital deduction, that amount is deemed to be the prior maximum, not the new unlimited amount, unless the formula is amended after September 1981, specifically referring to the new amount.

Married couples should not delay their estate planning until the first spouse dies because:

  1. Both could die at the same time in a common accident;
  2. One could become incompetent and the other one die;
  3. Both could become incompetent within a very short period of one another;
  4. After the death of the first spouse, the one surviving may not have or take the opportunity to adequately plan his or her estate.

If you are fortunate enough to be married, why not do your estate planning together as a team instead of leaving it for the surviving spouse to worry over? Married couples often have durable family powers of attorney for one another, which is an excellent tool if one becomes incompetent or incapable of signing checks, stock certificates or other financial instruments. Powers of attorney become ineffective upon death or when one becomes adjudicated incompetent.

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