MARRIAGE: GETTING IN AND GETTING OUT

Spouses have special rights ... and should be given special consideration ... in estate planning.

Marriage, probate and divorce laws are different in each state; therefore, you cannot count on the law of your state being the same in the state where you retire or where one of your children gets a divorce.

Also, the laws of common-law marriage can effect an estate plan; and, again, each state's laws are different.

In my judgment, the greatest estate planning mistakes made, in regard to marriage, are these:

1.) Perhaps the greatest estate planning mistake is made by married couples who suppose that "the other partner gets everything" and, consequently, fail to effect a plan. In many states, a person dying without a will and without other provisions for property distribution, leaves part to spouse and part to children.

2.) The second biggest mistake is, I think, the failure, by taxable estate people, to divide the estate into two separate ownerships, thus imposing an additional tax of as much as $235,000.00 on the family.

3.) When planning the distribution of an estate to children, most planners fail to take their in-laws into consideration. They fail to realize that a substantial portion of their estate can, quite easily, wind up in the hands of in-laws. (See: How to Disinherit Your Son-In-Law)

4.) When marrying, particularly for the second time, planners fail to properly plan the estates so that each partner and the heirs receive appropriate care.

5.) Parents fail to plan for possibility of divorce in their children's lives. (See: Keeping Your Money Out of Your Daughter's Divorce)

State laws, by such means as the Widow's Election, Inherited Property Rights and deed language have made many efforts to protect spouses from losses; but, all of these means can be, purposefully or accidentally, circumvented.

The By-Pass Trust, the Q-Tip Trust, the Life Insurance Trust, Premarital Agreements and the Living Revocable Trust can help spouses to plan properly.

If you want to benefit charity as a secondary beneficiary, behind your spouse, there are several ways to do it. A By-Pass or Q-Tip, naming "The Foundation" as the ultimate beneficiary, are both excellent devices. If you want an income tax deduction, you might choose a Charitable Remainder Trust.