One of the themes of this blog is that estate planning is not a one-and-done activity. To be sure, for a married couple it may seem straightforward to simply leave everything to each other. After all, that is what a tenancy by the entirety is intended to do for jointly held property. And a will can pass along other property, often via a trust.
At that point, however, the need to go through probate may be triggered. That is why, in Massachusetts and across the country, the most effective forms of estate planning take account of ways to avoid probate.
One way to do this is to through revocable trusts. Revocable merely means that it could be changed. But change is a legitimate possibility in an estate planning process that, as important as it is, is not static and fixed for all time. For example, if the parties get divorced, the estate plan should change accordingly.
Still, a basic procedure that makes sense for many couples is for both marriage partners to create revocable trusts. In this way, marital property is left not directly to the other spouse, but to the trust for transmission to the spouse.
In order to implement this type of estate plan, a key step is therefore to make sure bank accounts and other financial accounts are appropriately retitled. Once they are retitled, the accounts would bear the names not of the spouses, but of their revocable trusts.
Of course, there are many factors that can be involved for specific couples. There is no such thing as a one-size-fits-all estate plan. It is good to be aware, however, of basic estate plan strategies such as the use of revocable trusts.
Source: “Estate Plan Funding for Spouses,” Forbes, Stephen J. Dunn, May 27, 2013
