Justin, my wife and I retired a few months ago. We are both in our sixties, in good health, and regularly travel to visit our children in Colorado and Florida. We have not set up a formal estate plan, and I feel we might not need to at this point in our lives. Since we are married and most of our assets, including the home, are jointly owned by the two of us, we should be able to access these at all times without worrying about probate, right? Am I missing something? – Mike
Jack, Congratulations on the retirement. It must feel great to go fishing for a change instead of going to the office each morning. I get this question often and the answer surprises a lot of people. You do need an estate plan now even though you’re married and own everything jointly with your spouse. If you or your wife were to be injured or become too ill to handle your own affairs, then even your spouse would need a power of attorney to manage many things. Common sense says that a wife can step in to help a sick husband simply because they are married, but this is untrue.
In order for a wife to gain access to her husband’s IRA account, sell a jointly owned home, or make important health decisions, she would need a power of attorney. Beyond that, what would your children do if something were to happen to both of you at the same time?
You must also worry about probate. While it is true that jointly owned property can pass to the survivor without probate, you need a more comprehensive plan to ensure that things pass to the kids if the surviving spouse dies at the same time or shortly after the first spouse. This is the type of planning we handle for clients each and every week.