The Basics of Estate Planning with a Spouse

Category: Estate Planning

The Basics of Estate Planning with a Spouse in Florida

If you’re married, you most likely want to plan your estate with yourself. After all, you’re spending your lives together, may have children who you want to provide for, and have likely acquired joint property. When you and your spouse sit down with an estate planning attorney, he or she will discuss the options that you have for transferring assets to your beneficiaries and ensuring that your wishes are carried out after one or both of you is gone. While the actual estate planning details that you go over are too personalized and in-depth to include in this blog post, you’ll find some of the basic aspect of estate planning with a spouse below.

Joint Ownership

You and your spouse may already have joint ownership of some of your larger assets, such as your house or money in a shared bank account. These types of assets should bypass probate and go directly to the surviving spouse when one spouse dies, provided the assets truly are in both spouses’ names. If, for example, you married your spouse after you already bought a house and you are currently listed as the only owner of the house, you’ll need to update the ownership to allow your spouse to inherit it directly.

Naming a Spouse as a Beneficiary

Most married people’s initial thought is to leave everything to their spouse so that their spouse and any children the couple have will be supported. However, the issue with this is that the children (or other beneficiaries) will face steeper estate taxes upon the death of the surviving spouse. It is possible to minimize estate taxes by setting up a credit trust. A credit trust is set up so that if you die before your spouse, a portion of your assets (up to the estate tax exemption amount) goes into a trust for the surviving spouse to use after they spend down their own assets. You can also set up a credit trust so that any remaining assets pass to the ultimate beneficiaries (usually the couple’s children) after the second spouse dies.

Setting Up a Marital Trust

In addition to a credit trust, you may also choose to set up a marital trust (known as a qualified terminable interest property trust, or QTIP). A marital trust can hold assets that can’t be included in the credit trust because they go over the estate tax exemption amount. Setting up this type of trust can help you avoid probate, qualify the assets in the trust for the unlimited marital deduction, give the surviving spouse assets that they can use to support themselves, and pass the remaining assets in the trust to another beneficiary after both spouses are gone.

Taking a Previous Marriage into Account

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If you had joint ownership of any property with someone from a previous marriage, you’ll need to make sure your ownership documents are updated for your current marriage. However, you will also need to take any stipulations in the divorce settlement into account (for example, if your ex-spouse got half of your house in the settlement, you would need to buy that half of the house from him or her in order to have joint ownership of the full home with your current spouse).

Keep in mind that this is just scratching the surface of estate planning with your spouse and should not be considered legal advice. Schedule a meeting with an estate planning lawyer in your area to make sure that you and your spouse are doing what’s best for each other and your children.

About the Author:

Christopher Q. Wintter is the founder of Wintter & Associates, P.A. and a board-certified expert in Trust and Estate matters by the Florida Bar. With more than 24 years’ experience as a practicing attorney, he also serves as an instructor and faculty member for the National Institute of Trial Advocacy (NITA)—the nation’s leading provider of legal advocacy skills training to practicing attorneys—and has earned the AV® Preeminent™ rating with LexisNexis Martindale Hubbell. He was also selected for inclusion in Florida Super Lawyers for 2011 and 2012 in Estate and Trust Litigation.