Spouses

For peace of mind, your spouse needs to understand your estate plan

BY LAURA FAULK

TRUST OFFICER FIRST UNITED BANK AND TRUST COMPANY

You probably have taken great steps to ensure your spouse will be financially secure after your death. However, a lack of understanding about how available assets will meet his or her future needs may cause your spouse to live either well above or well below the affordable level of comfort. Make sure your spouse understands what resources will be available after your death and how your estate plan will be implemented. This can help provide some peace of mind for your spouse—and possibly for you, too.

Understanding the Estate Plan

In many marriages, one spouse is more financially astute than the other, and he or she typically holds the majority of the financial planning responsibilities. At your death, you probably don’t want your surviving spouse to have to quickly learn how to manage finances at such a difficult time. Better for him or her to learn now— while you are alive.

Preparing your spouse to take a more active financial role includes a review of the family’s assets, liabilities, income and expenses. Make clear what income will be available, especially if your death will substantially impact cash flow. Make your spouse aware of which resources will provide income, such as retirement plan distributions, life insurance proceeds, and earning on investments and annuities. Also, be sure your spouse understands what tax, expenses, and debts will be incurred after your death.

If your spouse is not interested in learning financial details, then arrange your estate plan with sufficient structure—such as a marital trust—to provide for his or her needs. And select a trusted adviser or professional trustee to assist in managing your spouse’s financial affairs.

Also, make sure your spouse has a basic understanding of what will happen to special assets, such as business interests, and the extent to which he or she will be involved with such interests. If your spouse isn’t, and doesn’t wish to become, actively involved in your business, then arrange your estate plan so that he or she is not burdened with the responsibility of managing it.

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