Especially here in Orange County, California it is very common for many married couples to own property or bank accounts jointly. If these assets are owned jointly or as tenants by the entirety, when one spouse dies, then the surviving spouse automatically becomes the sole owner. In a lot cases, this is the desired outcome for married individuals. However . . .
Without additional consideration, this approach could have disastrous consequences!
This approach can be dangerous! While it is convenient for assets to pass automatically to the surviving spouse, this distribution offers no protection. What happens if, after your spouse dies, you get into a car accident and are sued? If the assets you owned jointly automatically became yours alone, this money and property are available to satisfy any judgment that could be entered against you resulting from a lawsuit.
Have you ever considered what would happen if your spouse remarries?
Entertain this question for a moment: what if, after you die, your spouse gets remarried? If the brokerage account you owned jointly becomes your spouse’s only, your spouse is now able to spend it all in any way he or she wants without any consideration for your wishes or your children. New spouse would potentially have unlimited access to the money you intended to pass to your children. With blended families being common today, this is a real concern for many people, which is what makes not addressing this issue in an estate plan so dangerous.
Estate planning addresses these issues and so many more.
Estate planning is the process of sitting down and thinking through some of these issues that you may have not previously considered. It means sitting down with your spouse and creating a plan for what happens to your joint property and accounts upon either of your deaths, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you.
So if you haven't done so sit down with an estate planning attorney and think through some of these issues so that you can protect yourselves, your family, and your financial legacy!