We've been working over the last few months with a woman who lost her husband during 2013. Although he may have had good intentions, he left his legal, tax, and financial affairs in a state of disarray - and for her - complete chaos. She said she has not had a good night's sleep since he passed away because of all of her worries about the condition of their tax, legal, and money matters. She doesn't want to leave it this way for her children.
We're helping her sort through the mess but it isn't easy. Their are dozens of "hard-to-find" financial accounts all over the place. The probate requires that the children and grandchildren participate in the settlement of his estate, she is unaware of her tax obligations, and as she descibes, "he left everything in a complete mess." She says she wishes she would have predeceased her husband so she would not have been left with all this stress and chaos.
Her problems could have been completely avoided. While chocolates are a nice Valentine's Day gift, you can give your spouse simplicity and peace of mind that comes from having your estate legal affairs in order. Here's what you can give your spouse:
- Avoid Taxes. To ensure that no estate tax will be due upon the death of the first spouse, you and your spouse's estate legal documents must be set up correctly. While the estate tax exemption is presently $5 million, most taxpayers feel this amount will be reduced to enable the government to collect more revenue from estates. Few married couples realize that having the right legal documents in place eliminates tax at the first death regardless of the estate's value.
- Eliminate Probate. Titles to real estate, investment accounts, and other assets in your name are frozen when you die. Access by your spouse to these assets is DENIED. Your spouse will have to go through the often painstaking process of hiring an attorney (hopefully my colleagues don't push your family around), to hold their hand while they go through a snail-paced court-supervised probate process of transferring your assets to your heirs.
- Avoid Descendant and In-Law Problems. If and your spouse establish your estate plan correctly, then when one spouse dies, the surviving spouse does not need to get any of the children (or their spouses) involved in the transition of assets from the married couple to the surviving spouse. Surviving spouses often get frustrated when they learn that they can't take certain action (sell their home, for example) without getting the signed, written, notarized, permission of others.
- Organization and Pre-Arranged. There's much to be said for leaving things financial, legal, and tax matters organized and well-documented for your loved ones. The difference between settling the affairs of one who left things disorganized versus one who left things "deliberately the right way" can be the difference between "years of chaos" and "days of simplicity."
IMPORTANT VALENTINE'S DAY P.S. It is common to see people perform "acts of appreciation" for their friends on this special day. On February 14, 2014, our home office (9191 Siegen Lane, Baton Rouge) will be collecting items much-needed by the Capital Area Alliance for the Homeless. Between 10:00am and 2:30pm on Friday, February 14, drop off the following items at our office: blankets, sleeping bags, roll-up yoga mats (to sleep on), toiletries (toothbrushes, toothpaste, combs, shaving razors, soap, shampoo, deodorant, nail clippers, etc.), back packs (to carry their belongings), used clothes in good condition, unused socks and undergarments, and canned goods/non-perishable food items. Financial donations may also be payable directly to the shelter and dropped off at our office. Free gift when you deliver your goods or charitable donation to our office on Valentine's Day: A Special Invitation For You and a Guest to our Upcoming Wine and Cheese Event for Select Referrers and Friends of Rabalais Law.