• Prepare formal estate planning documents to carry out your wishes. Without a will or other estate planning documents, the state will determine how your estate is distributed. That means your spouse will receive a statutory percentage of your assets. Even with a will, your spouse can typically override its terms and elect to receive the statutory percentage. To prevent this, you usually need a prenuptial or nuptial agreement, detailing how assets will be divided after death.
  
  
• Consider a Qualified Terminable Interest Property (QTIP) trust to protect your children’s inheritance. When assets are left outright to your spouse, he/she controls their ultimate disposition. With a QTIP trust, your property is placed in a trust after your death to be used by your spouse during his/her lifetime, with the principal distributed after your spouse’s death to beneficiaries you designate. Since this qualifies for the unlimited marital deduction, no estate taxes will be paid when you die. This may not be a valid strategy if your spouse and children are approximately the same age, since your spouse could outlive your children.
  
  
• Title property carefully. Property owned jointly will automatically pass to the survivor. You cannot change this distribution through estate planning documents.
  
  
• Review beneficiary designations and life insurance amounts. It’s not unusual to forget to update beneficiary designations for retirement accounts, individual retirement accounts, and life insurance policies. These assets will be distributed to the named beneficiaries, regardless of the terms of your estate planning documents. Also review your life insurance amounts. You may find you need more to help ensure all heirs are treated equitably.
  
  
• Discuss your plans with your spouse and children. Openly discussing your plans before death may prevent disagreements among heirs after your death. This can be especially important in situations involving stepparents and stepchildren.

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