Estate planning for married couples
After you say “I do” there is a combining of lives and of assets. Tangible, personal property is easy to combine because you see it in your home. Intangible property, like financial accounts have their own legal rules about “what is mine is ours” after the marriage ceremony.
Marriage and joint bank accounts
Bank accounts do not merge once you are married. Surprising to many people, marriage doesn’t grant you a legal right to the information in your spouse’s bank account. If you want your spouse to be a joint owner on your bank account, you will need to complete paper work with the bank to add them. Alternatively, you can open a new bank account together in joint ownership.
Marriage and single bank accounts
You or your spouse may prefer to keep separate bank accounts. To make it easy for your spouse to inherit from your bank account after you pass, add them as a payable on death (POD) beneficiary on the account. The bank or credit union will have their own form for you to complete to add a payable on death (POD) beneficiary. It is also a good idea to add an alternate beneficiary. You will also want to execute a power of attorney to name your spouse to access accounts in your name if you become incapacitated.
Marriage and real estate
If you and your spouse are not both on the deed to the house, then your spouse will have to go through the court-supervised probate process to have the house transferred into their name. This situation comes up when one person owns the home before marriage and doesn’t update the deed to the house after marriage. Another situation that requires probate regarding real estate is when there is a second property owned by one spouse; it may have been purchased as a rental home business, a house to flip, or property that one spouse inherited from their family. If a spouse is not on the deed as a joint tenant with full rights of survivorship, then probate is required.
Be careful not to confuse the mortgage on the property with ownership of the property. The deed to the property determines ownership. The mortgage on the property is a loan borrowed to purchase the property. A mortgage does not determine ownership of the house; it determines liability for repayment of the loan. A mortgage is typically secured by the house, therefore, if the mortgage isn’t paid, the holder of the mortgage has legal remedies to take the house.
To see a copy of your deed, look for your county assessor page and search your property. Most assessor pages have an image of the deed on the page for the property. If you can’t find it online, you can go to the county recorders office where the deed was recorded and ask to see a copy of the deed.
If you need to add your spouse to your deed, contact an attorney. Real estate attorneys typically prepare a deed for a reasonable flat fee. Don’t be shy about asking for help, this is not a DIY situation.
Marriage and life insurance
I am going to take a quick detour from legal talk to put in a plug about life insurance. I always thought about life insurance as a gift of inheritance to a loved one. That is one reason, but the more practical reason is this - to replace income. The benefits of marriage are that you combine living expenses and lifestyles. Life insurance to benefit a surviving spouse will allow them to stay in the house and help prevent a huge disruption in their way of life.
Life insurance through your employer is not enough. It typically covers a year of your salary. Math will bring this point home. Multiply your yearly income by the number of years until you turn 64. That is what your spouse stands to lose if you do not have life insurance beyond coverage from your employer.
Now to return to estate planning and life insurance. You must add your spouse as the beneficiary of your life insurance policy. If you have a policy before you are married, you likely have a parent or sibling as the beneficiary. They are the beneficiary until you do the paperwork to change the beneficiary. I also recommend adding an alternate beneficiary to your life insurance.
Marriage and retirement and investment accounts
Retirement accounts transfer by beneficiary designation. You will need to add your spouse as a beneficiary and, like life insurance, your spouse is not the beneficiary until you do the paperwork. If you don’t have a beneficiary when you pass away, it will transfer to your spouse, but if it exceeds the value of small estate affidavit, then the probate process is required. Likewise, if you don’t have a beneficiary who survives you, probate is required. This is a reason to always name an alternate beneficiary.
Obergefell and spousal inheritance
Obergefell v. Hodges is a 2015 United States Supreme Court opinion on marriage equality. The case established law that a State must license a marriage between two people of the same sex AND a State must recognize a marriage between two people of the same sex when it was lawfully performed in a different state. As it pertains to estate planning, spousal rights exist after a legal marriage, or in some states, upon proof of a common law marriage. For simplicity, I am going to focus on a certificate of marriage and not common law marriage.
Each state has its own requirements for obtaining a certificate of marriage. In Iowa, go to or contact the county registrar where you live to learn how to apply for a marriage license. A marriage officiant, two witnesses present at the ceremony and the couple will sign the certificate of marriage and return it to the county registrar.
Once you are married, this first part of this article is applicable in order to leave your assets to your spouse after death. This doesn’t completely set minds at rest. Couples in same sex marriage are concerned, rightfully so, because of the recent decision in Dobbs v. Jackson where the United States Supreme Court overturned Roe v. Wade and Planned Parenthood v. Casey stating that the United States Constitution does not confer a right to abortion. The opinion in Dobbs stated that the laws regulating abortion are now up to the individual states.
Without going into the law of stare decisis, the same Court that said the United States Constitution does not confer a right to abortion could decide that the same Constitution does not confer a right to same sex marriage. Before Obergefell, each state regulated its own laws on marriage and, given the opportunity, United States Supreme Court may overturn Obergefell and leave each state to regulate marriage. The right to privacy, due process and equal protection can be changed by law; either a court decision or an enactment of the law by a state or federal government.
If Obergefell is overturned by the United States Supreme Court, will a marriage of persons of the same sex still have the same legal spousal rights? Likely, yes. Laws are rarely retroactive, meaning, once you are married, you and no one else gets to decide you are not married, unless you dissolve your marriage through a legal process. But the law is complex and exercising a right to inheritance as a surviving spouse could become complicated. You don’t want it to be complicated for your spouse to inherit your estate.
Make it easy for your spouse to inherit your assets:
Get a Last Will and Testament and name your spouse as the beneficiary.
Add your spouse to your deed for real estate.
Add your spouse as a joint owner or payable on death beneficiary to your bank account.
Add your spouse as a beneficiary of life insurance.
Add your spouse as a beneficiary on your retirement and investment accounts.
These steps assure legal transfer of assets whether or not your are married.
For decision making during your lifetime, execute a power of attorney document to name your spouse as your agent for healthcare decisions and financial decisions.
Life partnerships and estate planning
Marriage is a very personal decision and if it is not something you elect to do, you can still assure your partner inherits from your estate. It is very important to talk with an experienced estate planning attorney to put in place the legal protections for your partner to be the recipient of your assets. While it would be easy to say you should do all of the 5 things listed above, some of them require more discussion about transfer of rights and unwinding that transfer if the partnership ends.
Explore the Will in a Day® option
Part of my Will in a Day® process is to review all accounts and how they will transfer after death. The Will in a Day® package includes an asset transfer worksheet that identifies the type of account and how it will transfer. If I have recommendations on updating the transfer plan, I include it in the worksheet as homework.
