When a spouse won’t discuss estate planning

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 Q. My husband and I have been married, but we have been living separate financial lives for more than 20 years. We’re in our 60s and I know we need to do something for estate planning, but he doesn’t even want to talk about it. We have two kids and that’s where I want our money to go when we die. He won’t discuss it. What can I do?

A. You’re smart to want to get your documents in place, but getting your husband to do it?

Lots of people are understandably very uncomfortable talking about death — especially their own.

You can’t make him, but you’re right, you should try.

If he won’t listen to you, perhaps he’ll listen to your children, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park. Perhaps if you gave them a primer on estate taxes, and who would actually get his assets when he’s gone, it would be some incentive to take action. Or, that he could make sure more of his money goes to his heirs instead of to the state or federal government in the form of taxes.

“If her husband still refuses to discuss estate planning with her, she should consult an estate planning attorney on her own and do her own estate planning,” Whitenack said.

If your husband dies without a will, his assets will be distributed under New Jersey’s intestacy statutes, she said, unless he has designated beneficiaries to inherit those assets upon his death.

That leaves you with four basic scenarios.

First, you and your husband could die without a will.

In New Jersey, the intestacy statute would control how your assets would be distributed, said Nancy Heslin Reading, an estate planning attorney with Reading Law Firm in Newtown.

“In broad strokes, and assuming that your parents have passed away, the surviving spouse would inherit the entire estate belonging to the spouse who just died,” she said. “Then when the second spouse dies without a will, all remaining assets are divided in equal shares among the children.”

Of course, there are lots of factors that could make this more complicated, such as if there were stepchildren, domestic partnerships or other relationships.

Reading said administering an estate where there is no will tends to be more costly because a bond is required, and there is little that can be done to reduce estate taxes.

In the second scenario, both spouses get wills drafted together.

The second scenario is that both spouses gets Wills drafted together, which Reading said is ideal because the attorney preparing the wills can make sure they compliment each other.

In this case, wills should do a number of things: they should incorporate flexibility as to potential tax planning if your combined assets exceed $675,000 (including any life insurance either of you have), they should have trust provisions in case any of your beneficiaries are minors at the time they inherit, and they should name your choice of executor and your beneficiaries.

“Very often, married couples have wills that leave everything to each other, and then if the other spouse predeceases, the estate is divided in equal shares among the children,” Reading said. “These wills work well as long as this is a first marriage, and all your children are common children.”

The third scenario is where one spouse has a will and the other does not — which is where it appears you could be headed.

If the spouse without a will dies first, all his/her assets pass to the surviving spouse. If the estate is a modest one, there may be little harm in this, Reading said.

“When the surviving spouse dies with a will, the combined assets of both spouses will be distributed under the will of the surviving spouse,” Reading said. “If the combined assets exceed $675,000, however, the second estate may be saddled with death taxes that could have been avoided if both spouses had wills that incorporated basic tax planning language.”

If the spouse who has the will dies first, and the surviving spouse does not have a will, the estate of the first spouse will be distributed as directed under the will, which may leave everything to the spouse, as spouses often do.

“In this scenario when the second spouse died, all the combined assets are distributed under the intestacy statute,” Reading said. “Again, if it is a modest estate and all children are common children, this might be okay although the administrator will be required to post a bond, as mentioned before, which can be a considerable expense.”

Reading said if you decide to prepare and sign a will and your husband does not, you may want to consider bequeathing your estate in thirds: one-third to your spouse, and one-third to each of your children.

“This way, even if your husband depletes his assets including the one third you bequeathed — typically on a catastrophic illness or long term care — the children will at least have inherited something under your will,” Reading said.

And Whitenack had one more suggestion: show your husband a copy of this answer to your question. He may see that there are so many reasons to talk about it now rather than taking chances with whatever may happen in the future.

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This story was first posted in February 2015.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.