Wednesday, March 11, 2015

Review and Update of Estate Plan by Surviving Spouse

When a spouse dies, it is important that the surviving spouse review his or her own estate plan and estate planning documents.  In most situations, a married couple nominates his or her spouse to serve as their attorney-in-fact (agent) under their power of attorney for health care decisions and as their attorney-in-fact (agent) under their power of attorney for financial matters.  Under these documents, the person nominated to make health care decisions and to handle the financial affairs for the surviving spouse is now deceased.  Accordingly, it is essential that the surviving spouse review the powers of attorney to insure that there are alternate agents nominated to so serve. 
 
Oftentimes the surviving spouse will desire to update the powers of attorney by making the alternate nominated party or parties under the existing powers of attorney now the primary nominated party or parties and adding new alternate nominated parties. This is also true for nominated successor trustees under the Trust agreement and for the nominated personal representatives under the Last Will and Testament of the surviving spouse. Again, the nominated successor trustee and the nominated personal representative is often the now deceased spouse. 

Such a review is not limited to these estate planning documents.  The surviving spouse should also review any insurance policies insuring the life of the surviving spouse as to designated beneficiaries.  Again, the spouse, who is now deceased, is usually the designated beneficiary of the policy.  The surviving spouse needs to be sure that there are alternate designated beneficiaries under the terms of the policy (a revocable trust is a good beneficiary for insurance policies).  Unfortunately, if there is no living designated beneficiary at the time of the death of the surviving spouse, some policies provide that the proceeds are paid to the estate of the insured.  This would in all likelihood result in the necessity of a probate of the estate of the surviving spouse, something we always try to help our clients avoid due to the costs and fees involved with a probate proceeding. 

Additionally, if the surviving spouse has a retirement plan, the designated beneficiary provisions of the plan should be reviewed to make sure that there are alternate designated beneficiaries other than the deceased spouse.

-Attorney John R. Mugan

 

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