While most people plan to leave their estate to their spouse and children, there are instances when you might not want your spouse to inherit. This is common when couples are estranged but have not yet sought a formal divorce for example, and the parties wish to create individual estate plans that do not include the spouse as the primary beneficiary.
But cutting your spouse out of your estate plan isn’t quite so easy.
All states recognize the existence of marital property in one form or another and require that the spouse inherit at least a portion of your estate.
Both Kansas and Oklahoma, for example, are equitable distribution states – so while your spouse isn’t automatically entitled to half of everything you have, the judge will expect your estate plan to bequeath a reasonable percentage of your estate to your spouse, estranged or not.
To address this concern, you can create a document that modifies the spouse’s rights to inherit and ask your spouse to sign. This waiver won’t necessarily eliminate the need to distribute to your spouse but it can help support your decision to bequeath only a minimum share.
In addition, you can choose to set up a trust instead of distributing the assets outright and stipulate that the spouse and/or the spouse’s needs must meet certain requirements before a distribution will be given. This would allow the trust to pay for things like medical and living expenses, but if your spouse needs neither, then the money could sit in the trust where it would eventually benefit your other heirs. The effectiveness of this option will depend on your state’s statutory and case law.
A prenuptial agreement would also enhance your ability to disinherit your spouse, working much like the waiver of rights suggested above. In the event that you did not execute a prenup before you got married, a postnuptial agreement, if allowed by your state law, would offer the same benefits.
To learn more about protecting your assets and creating an estate plan, contact our office today.
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