Essential Estate Plan Changes Following the Death of a Spouse
We all know that life isn't permanent, but let's face it—death isn't exactly anyone's favorite topic of conversation. It's easy to push estate planning to the back burner, but waiting too long could leave you unprepared.
Even if you're among the one-third of Americans with a will, there's still more work to be done. Our estate plan needs regular check-ins, especially after big life changes, such as the death of a spouse. But there's no need to start from scratch.
The groundwork is already there. You just need to make estate plan changes that reflect your new circumstances and ensure your wishes are still honored.
Should I update my powers of attorney?
If you had your spouse listed as your power of attorney (POA), you'll need to appoint someone new. Your POA is the person who makes financial and healthcare decisions for you if you become incapacitated.
In many cases, people name their spouse as their first choice. Now, it's time to choose someone else you trust. Make sure you update both financial and healthcare POAs to cover all your bases.
This ensures someone can manage your assets, pay bills, and make medical decisions in line with your wishes. Once updated, inform your newly chosen representatives of their roles so they know what's expected if the time comes.
When should I review my will or trust?
After a spouse's death, your will or trust needs a fresh look. Chances are, your spouse was mentioned extensively in these documents. You might need to change who receives certain assets or adjust specific instructions on how your estate is divided.
If you and your spouse had a shared or joint trust, check whether the terms are affected by their passing. You may also want to consider consolidating or redistributing assets.
Do I need to revisit my beneficiaries?
Life insurance policies, retirement accounts, and other financial assets typically list your spouse as the primary beneficiary. With their passing, you'll need to make some changes.
However, many plans have secondary (contingent) beneficiaries already in place. So, while updating beneficiaries is important, it might not be the most urgent step. Still, it's smart to review every account to ensure your designations are accurate and reflect your current wishes.
Should I consider adding a trust?
After your spouse's death, adding a trust could be a savvy move. Trusts allow you more control over how your assets are distributed. Plus, it can help avoid probate—a time-consuming legal process that can delay distribution to your heirs.
There are different types of trusts to consider. A revocable living trust keeps you in control of your assets during your lifetime, while an irrevocable trust shields assets from being taxed or counted for Medicaid purposes.
This is particularly important if long-term care becomes necessary. Given the cost of care, adding a trust can protect your assets for your heirs instead of draining them to pay for medical expenses.
What's the next step after making estate plan changes?
While the death of a spouse can pause life in its tracks, it's important to review and update your estate plan. Once you've made the right estate plan changes, the last step is putting it all into action. Meet with an estate planning attorney to ensure your documents are legally binding and reflect your new situation.
The Law Firm of Brown & Jensen can help you create a plan that reflects your wishes and safeguards your family. Whether it's drafting a will, setting up a trust, or updating your documents after life changes, our experienced Arizona estate planning attorneys are here to guide you every step of the way.
We provide personalized advice so you can make sound decisions for your future. Take the first step and contact us for a free consultation with an attorney who will treat your estate plan with the attention it deserves. You can also call or visit any of our law offices in Mesa, Tucson, Scottsdale, Chandler, Goodyear, Peoria, Show Low, and Payson.