Married couples have unique needs and goals when it comes to estate planning. The marriage relationship carries several implications for married couples when it comes to determining ownership of assets and tax consequences of transfers. Further, married couples may need to consider how to protect their assets should one spouse require long-term care. Family dynamics can complicate estate planning for married couples even further, especially if one or both spouses were previously married and subject to a prior prenuptial agreement or divorce settlement agreement that impacts how their assets will be distributed upon their death. Children from prior relationships or marriages require careful consideration as to how and when assets will be distributed amongst the children. Will all assets go to the surviving spouse when the first spouse dies, only to be distributed to children and stepchildren upon the death of the surviving spouse? Will a trust provide for distributions to children and stepchildren during the surviving spouse’s lifetime? These are questions an estate planning attorney can help married couples navigate.

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Married couples should also understand what will happen under Pennsylvania law if they die without an estate plan. If a married person dies without a will, the amount of their estate that goes to the surviving spouse depends upon whether the deceased spouse was outlived by his or her parents or any children. If the deceased spouse was not survived by parents or children, then the entire estate goes to the surviving spouse. The estate will be subject to the current inheritance tax rate of 0% applicable to transfers between spouses.  If the deceased spouse had no surviving children but was survived by his or her parents, then the surviving spouse receives the first $30,000 from the estate plus one-half of what remains in the estate. For example, if the estate is valued at $100,000, the surviving spouse would receive $65,000 which is $30,000 plus one-half of the remaining $70,000 (i.e., $35,000), and the deceased spouse’s parents would receive the remaining $35,000. The distribution to the parents would be subject to the inheritance tax rate of 4.5% for transfers to lineal heirs. If the deceased spouse was survived by children, the surviving spouse will have less than a 100% share of the estate. The amount of the surviving spouse’s share depends upon whether all or the surviving children come from the same or a prior marriage. Therefore, spouses should consider carefully whether these laws are consistent with their intentions for the estate upon each of their deaths.

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Before married couples meet with an estate planning attorney, they should discuss together how they would like their assets distributed upon their deaths. While an estate planning attorney can generally represent both spouses in crafting their estate plan, the attorney may be required to cease representation of one or both spouses if a conflict of interest arises. Therefore, married couples should try to identify any areas of disagreement or potential conflicts prior to engaging an attorney. This will allow the attorney to identify at the outset whether joint representation makes sense for the couple, saving them the extra time and expense of retaining separate counsel at a later date.

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Estate plans for married couples can range from the very simple to the incredibly complex. Ferrara Law is here to help you navigate these decisions and ensure your estate plan reflects your goals and values.