Legal Preparation for Your People
PLEASE NOTE: WE ARE NOT LICENSED ATTORNEYS.One of the ways Prepare Your Affairs simplifies the end-of-life preparations process is to break it down into four pillars of preparation (financial, legal, mental/emotional/spiritual, and practical) for three target beneficiaries: your people, your person, and your possessions. This week our tip focuses on legal preparation for your people – making and communicating the appropriate legal arrangements that will allow your people to settle your estate quickly and efficiently in a way that provides for their needs according to your wishes.
For simplicity’s sake, we’re going to address the topic from a couple’s standpoint, though we recognize that not everyone is in that situation. Feel free to adjust or modify your planning in a way that fits your circumstances and those you support best.
It’s also important that you consider the information from two perspectives:
How can the appropriate legal documents protect my loved ones if I die
How can the appropriate legal documents protect myself and others if my spouse dies
Legal Support for your People
From our experience and from what we’ve seen from those in our support group, two of the biggest legal challenges widows and widowers face is:
Gaining access, ownership, and control of accounts, real estate, and other possessions
Family infighting
Access and Ownership
When you consider your assets, accounts, and possessions as they relate to your end-of-life plans, consider how each of those factors into your family’s life. The more your family relies on them, the quicker the access your family needs after your death. For example, if you “keep the books” in the family and pay the bills from a checking account that is only in your name, you should make it a priority to see that your spouse has immediate access to that account. The bills don’t stop coming just because of a death.
The easiest way for the surviving spouse to avoid trouble accessing accounts is to have both spouses’ names listed as account owners. When one dies, the surviving spouse can then continue to manage and control the contents of the account and have the deceased’s name removed by showing a death certificate.
For a variety of reasons, spouses may have their own accounts. Perhaps they are accounts that were set up before the couple married, or they are retirement accounts tied to employment. The best way to pass these accounts to the appropriate people is by naming beneficiaries or creating payable-on-death or transfer-on-death arrangements. The terms vary depending on the type of account, but the result is essentially the same. The named beneficiary or recipient takes over ownership of the account and/or receives its contents.
The transfer of real estate and other possessions and property such as cars, valuable collections, and copyrights are usually done through a will or trust. Creating a transfer-upon-death arrangement may also be an option for these types of assets as well.
When none of these methods are used to pass on assets after death, they become subject to intestate succession laws. These laws, which vary from state to state, define a hierarchy of inheritance. First on the list are usually spouses and children, followed by parents or siblings, and so on. While your spouse may be the one you want to inherit your account, transferring the account via intestate law can take time and be expensive. Attorneys may get involved and court dates required for the proper transferring of the account to take place.
Family Infighting
Where it really can get messy is when families end up fighting each other for control. Usually this happens when no plan has been made. The sense of entitlement and desire for control by a deceased’s parents or siblings can overwhelm a widow or widower to the point of exhaustion and exasperation. Ex-spouses and older adult children are also notorious for getting involved and claiming ownership of assets and accounts. One widow reported that a stepson rushed home after the funeral to steal some of his dad’s things before the rest of the family returned, possessions the spouse wanted to keep for herself. This type of behavior not only sours relationships for years to come, but can also result in lengthy and expensive legal battles.
Despite estate plans or intestate laws, families can still get unruly. Death has a way of making people act in ways they normally wouldn’t. While even the best made plans don’t always work, we find that communication can be the key. We always encourage couples to share with their immediate and extended family that they have all of their end-of-life plans in place. They may or may not choose to share details, but often knowing legal plans exist can ease the tension and mistrust and keep the sticky fingers of others to themselves. Plus, if there are any challenges to be made about who inherits what, it gives the planners a chance to explain themselves rather than leave it up to the spouse to have to defend after passing away.
All of these issues of transferring assets, real estate, possessions, and accounts can be complicated. We highly encourage families to seek out the guidance and expertise of licensed attorneys who understand the nuances of local law and can recommend action specific to your circumstances.
For additional assistance or guidance, contact Prepare Your Affairs at peaceofmind@affairsinorder.com.
