McClellan Legal LLC Estate Planning & Tax Assessment Blog

Thursday, April 9, 2020

Protecting Your Spouse with Estate Planning

My clients often tell me that protecting the financial well-being of their spouse is one of their most important planning objectives.  These clients are concerned with ensuring that sufficient assets go to their spouse and that their spouse has the experience to confidently manage these assets.  Proper estate planning can solve these issues and protect a surviving spouse.

Ensure Transfer of Assets to Your Surviving Spouse

In many states (including Pennsylvania), a surviving spouse may not automatically receive all the assets owned by a deceased spouse.  For assets that are jointly owned by both spouses, this is not usually an issue.  However, if your spouse has individually owned assets and died intestate, or without a Will, then state law may send a large portion of the individual assets to the deceased spouse’s children (or if no children, to the deceased spouse’s parents). Without a Will, the state’s intestacy laws control the distribution of individually owned assets.

We can easily resolve this issue in a couple of steps. First, we would create a Will that clearly expresses your desires. Then, we would confirm that your spouse is listed as the primary beneficiary on all of your financial accounts.  It’s incredible how often surviving spouses are blindsided by blank or wrong beneficiary designations.  After completing these two steps, you can feel confident that your spouse will have the financial resources that they need.

Managing the Transfer of Financial Knowledge

Additionally, a spouse may be concerned as to whether the surviving spouse has the financial knowledge to manage the money. I find that one spouse is primarily or solely responsible for managing family finances in many relationships.  This spouse (the financially knowledgeable spouse) is typically nervous about their surviving spouse managing financial matters without them.  Likewise, the surviving spouse often indicates that this is concern due to a lack of experience.

This issue is not as easily resolved and should therefore receive thoughtful planning.  It is critical for the financially knowledgeable spouse to transfer knowledge to the other spouse before it’s too late.  At a minimum, the financially knowledgeable spouse should document a list of accounts, liabilities, and strategies that are currently implemented so that the surviving spouse has a blueprint to follow.  Better yet, the financially knowledgeable spouse could include their spouse in the financial matters to increase that spouse’s confidence doing these tasks.

Occasionally, the financially knowledgeable spouse becomes incapacitated or passes away before documenting financial matters or sharing financial strategies with the surviving spouse.  In that situation, the surviving spouse often feels anxious about taking over the financial matters.  I have found it useful for a professional (e.g., daily money manager, financial advisor, accountant, etc.) to assist the surviving spouse in discovering their assets/liabilities and developing a new plan for managing the finances moving forward.  These are difficult issues that can usually be resolved with a little planning.  McClellan Legal has strategies to help before it’s too late.

If you would like to discuss your estate planning needs, please do not hesitate to call our office at 610-444-5552. We will be more than happy to schedule a free initial meeting with you.



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McClellan Legal LLC is located in Kennett Square and serves clients throughout the areas of Avondale, Chadds Ford, Coatesville, Downingtown, Landenberg, Oxford, Phoenixville, Pottstown, West Chester, & West Grove.

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113 South Broad Street, Kennett Square, PA 19348
| Phone: 610-444-5552

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