"Buy One, Get One Free" has become a marketing mantra in America. After all, if you like a product, and you can get twice as many without paying more, that’s the Holy Grail of shopping... or estate planning.
Such is the attraction of the joint will as an estate planning vehicle. You are married. You agree with your spouse on the administration of your estate, regardless of which of you dies first. So why go through the time and expense of two estate plans when you can get a BOGO?
As Browning said, let me count the ways…
What Is A Will?
Before discussing a joint will, let’s discuss the purpose of a will.
A will provides for the legal distribution of property owned by you at the time of your death in whatever manner you choose, so long as that manner doesn’t violate your state’s laws. Without a will, your state’s laws set out a scheme for inheritance that may or may not be the same plan that you would have chosen for yourself and your heirs. Each person should ideally have his or her own will, especially spouses, which allows for better control of each person’s wishes when either spouse dies.
What Is A Joint Will?
A joint will is not executed by one individual but is jointly executed by two persons, usually a married couple. Under a joint will, the surviving party inherits the entire estate when the other person passes away. A joint will is actually a contract between the two people who make the will and can only be modified by those two people under the principles of contract law.
Joint Will Problems
If you believe in fortune tellers or believe that you can foresee the future, then a joint will may work for you. Otherwise, let’s look at real life:
You are a married couple. You have disagreements. What if you have a disagreement over the arrangement agreed upon in the joint will? One unique aspect of a joint will is that neither party can unilaterally change or revoke the joint will even after one of them dies.
And if things can change during the marriage after a joint will is executed, consider the possibilities after one of the parties to the will dies. The other party may get remarried and/or have more children. Since there is no unilateral change allowed, even after the death of one of the parties, there is no changing the distribution scheme. Because the deceased party no longer has the ability to change his or her wishes about the will, there is no legal capacity to do so because there can be no “meeting of the minds” of the two parties as required by contract law. So the new spouse and children of the new marriage may be left without options for inheritance.
Here are some of the things that you CAN’T do with a joint will after the death of your spouse:
- Sell a home that you shared with your deceased spouse, even if you need to move out of it into an assisted living facility or nursing home or for any other reason;
- Change your will if you move to another state that has different estate planning laws;
- Change the terms of inheritance for biological or stepchildren who have embarked on a less than productive course since your spouse’s death, such as substance abuse, reckless spending, and bankruptcy;
- Help a family member with the purchase of a home or college expenses in a manner that would go against the intentions of the will; and
- Change a beneficiary or name a new executor.
Here’s a possible scenario:
You and your spouse create a joint will. You have no children of your own but your spouse has three children from a previous marriage who become your stepchildren. The joint will, created at a time when you are all one big happy family, may fail miserably in the future when your stepchildren become distant or even estranged. The share of the estate that they are designated to inherit upon your death may no longer be your wish for the distribution of your assets. Nonetheless, with no way to change the joint will, they will still inherit their portion as designated during happier times.
Avoiding Problems By Creating A Trust
Can you think of something you did a decade ago that you wouldn’t consider doing now? You change, your values change, and the world changes. A joint will can be more than a memory of a bad decision. It basically imprisons your assets.
Joint wills were more popular years ago when people were less mobile and didn’t move from state to state for employment, marriages were more likely to last a lifetime, and blended families were less common.
While another type of will may be a better option than a joint will, other methods of estate planning may be even more useful. Creating a trust can accomplish many of the goals of a joint will, such as making sure that all of the assets go to the spouse and then to the children of that marriage. But when things change, as they often do in these times, a revocable trust may be changed to accommodate new developments. In addition, a trust can even control assets during the lifetime of the person who creates it. Property can be transferred into the trust and used for income. A trust also can distribute property and assets without going through the probate process.
Most couples do not die like Romeo and Juliet… almost simultaneously, in each other’s arms. When one spouse survives another, family dynamics are likely to change before the surviving spouse dies. Having an estate plan that accommodates the realities of 21st century life is crucial to ensuring you are able to carry out your wishes when things change. Proper planning with an experienced professional can avoid years of turmoil for your family and your wishes going unfulfilled.