Updating Your Important Documents
Whether or not this is your first marriage, you'll want to review major documents to see if changes are needed. Even if you've been married for some time, it's not a bad idea to take a look at these documents:
- Estate planning documents -- If this is your first marriage, you may not even have estate planning documents. In that case, at least get a simple will and durable power of attorney. For those entering a subsequent marriage or with children, thoroughly review your estate planning documents. You may need to make changes to provide for your spouse while also protecting your children. Due to changes enacted by the 2001 Tax Act providing for the gradual elimination and then reinstatement of the estate tax, you should review your estate planning documents every couple of years.
- Asset ownership -- Review how assets are titled to ensure they are consistent with your estate planning goals. If assets are owned jointly with rights of survivorship, that will take precedence over any provisions in your estate planning documents.
- Assets with beneficiaries -- This would include life insurance policies, retirement plans, and Individual Retirement Accounts (IRAs). For assets with named beneficiaries, those designations will take precedence over your estate planning documents. For retirement plans and IRAs, new regulations issued by the Internal Revenue Service in April 2002 significantly changed how beneficiaries must take distributions from inherited plans.
- Business arrangements -- If you are a partial owner of a business, review any agreements dealing with what happens to the business if you die or want to sell your interest. The agreement may need to be changed to make provisions for your spouse.
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