Estate planning for newlyweds is typically the last thing a couple thinks about after the ink dries on a marriage license, but it is important aspect to consider as the couple begins their lives together.  Although this article might seem directed at young, first-time married couples, these five considerations can be applicable for people who marry, or remarry, at any age.

1. Review Life Insurance Policies

Getting married presents a good time to review life insurance needs and is part of a sound plan of estate planning for newlyweds.  As workplace life insurance policies are often limited in coverage, additional life insurance should be considered if the new couple will depend on both incomes for housing costs or wants to have children in the future.

Furthermore, it’s always worth considering adding additional life insurance while a couple is younger to lock in more competitive premium rates.  Finally, recently married couples should check existing life insurance policies and change the beneficiary designations on their policies to name their new spouse on the specific policies they want to leave to their spouse.

For life insurance policies through their employer, newlyweds should visit their employer’s human resources department to update  their beneficiary designations as soon as possible after the wedding.

Contrary to popular belief, there is  no federal or Texas statute that indicates life insurance policies automatically pass to a spouse in a manner similar to retirement accounts under the Employee Retirement Income Security Act of 1974 (ERISA).  Therefore, a spouse’s unexpected death becomes more tragic and complicated when a widow discovers that their late spouse never removed his/her parent’s as the life insurance policy’s primary beneficiaries.  Simply put, update your beneficiary designations if you haven’t already.

2. Review Retirement Accounts

For a majority of young adults, retirement accounts are managed by their employers.  Another step toward proper estate planning for newlyweds is to visit their employer’s human resources department and update the beneficiary designations for their retirement accounts.

A simple change to a retirement account’s beneficiary designation can save headaches and delays if a spouse dies unexpectedly.  Generally, workplace retirement accounts are largely governed by ERISA which presumes and requires a spouse to be named as the beneficiary to retirement accounts unless written consent is given.  As a result, many newlyweds do not believe it is necessary to update beneficiary designations for retirement accounts.

Though ERISA provides protection if the beneficiary designations are not updated, it is common to see administrative delays and other complications with a late spouse’s employer when the widow requests disbursement and is not named as the primary beneficiary.

3. Take Advantage of Homestead Protections for Families

As many people purchase homes prior to marriage, it is generally advantageous to take advantage of extended homestead protections for family after a couple gets married, especially if the couple owns acreage and/or plans to live in the country.  Under Texas law, homesteads are allowed advantages such as decreased property taxes and asset protection against creditors.

In urban areas, single adults and families can claim up their home and up to 10 acres as homesteaded property.  In rural areas, single adults can claim their home and up to 100 acres, while a family can claim their home and up to 200 acres.  Regardless of whether you live in an urban or rural area, it is important to check with your local county appraisal district after you get married to ensure that you are receiving a homestead property tax exemption.

Additionally, as part of extended estate planning for newlyweds, some couples decide to place their homes in a living trust, along with pour-over wills.  This adds a measure of anonymity against potential creditors and also helps defray the expenses and delay of probate since the living trust does not die and title remains in trust, regardless of the death of one of the beneficiaries.  Furthermore, Sec. 41.0021 of the Texas Property Code allows for the transfer of real property into a qualifying trust without losing its exempt character as homestead property.

4. Draft Powers of Attorney and Living Wills

In Texas, marriage does not give a spouse the power and/or absolute right to make decisions for the other spouse if they become incapacitated.  To ensure that a spouse is the only one who can make legal/financial and medical decisions, each newlywed spouse should execute a durable power of attorney, a medical power of attorney, and a medical advanced directive, known as a “living will.”

A durable power of attorney provides the power for a spouse to make legal and financial decisions if the other spouse becomes incapacitated, while a medical power of attorney provides for a spouse to make medical decisions for the other spouse in the event of incapacity or accident.  Living wills allow a spouse to legally convey their decisions about end-of-life care and treatment.  Essentially, living wills provide a way to communicate to your spouse and other family members your directions regarding end-of-life care to avoid confusion later on.

Finally, in regard to powers of attorney and living wills, it is a good idea to also name an alternate besides your spouse in the event of an accident in which both spouses are injured and/or incapacitated.

5. Execute Wills

Even if a newlywed couple does not have many assets, it is still good practice to execute basic wills that leave all assets to their spouse.  Furthermore, if the newlywed couple has real property and wishes to place property in a living trust, it is important to consider adding a will with pour-over provisions.

Without a will, Texas law requires a determination of heirship, and intestacy rules become fairly complicated, especially if they had children before the marriage.  For instance, if a spouse owns separate personal property and has children, 1/3 passes to the surviving spouse, while the children take the other 2/3’s in equal portions.

Additionally, if a newlywed couple executed a prenuptial agreement, they should execute wills that accurately reflect the terms of the prenuptial agreement.  It is important to note that a prenuptial agreement does not take the place of proper estate planning.  Essentially, the estate planning of the newlywed couple should mirror what the prenuptial agreement provides for in event of the death of a spouse.