Estate planning is an important process for married couples. This effort helps ensure that assets are protected and distributed according to a couple’s wishes. With that being said, many couples assume that a joint estate plan is sufficient. In reality, spouses often need distinct estate plans to address their individual financial and legal needs. While some estate planning documents can be coordinated, each spouse should have their own plan to account for personal assets, unique wishes and potential future circumstances.
California is a community property state, meaning that most assets acquired during marriage are considered jointly owned by both spouses. This includes income, real estate and other property. However, separate property—such as assets owned before marriage, inheritances directed to one spouse alone and some kinds of gifts—remains under individual ownership. Because of this distinction, spouses often need separate estate planning documents to specify how both community and separate property should be handled in the event of one’s incapacitation or death.
While many couples prefer to create similar estate plans, having distinct documents can help to better ensure that each spouse’s interests are addressed. This can be particularly important in blended families, couples whose unions are second marriages and/or situations where one spouse has significantly more personal assets.
Documents that each spouse needs to have in place
Even though spouses may share similar estate planning goals, they should each have their own set of key documents, including:
- A will: Each spouse should have a will outlining their wishes for asset distribution. This is particularly important for separate property or personal assets that may not be jointly owned.
- A living trust: While some couples create joint trusts, each spouse may also have a separate trust for personal assets that will bypass probate and be distributed efficiently.
- Power of attorney: A financial power of attorney allows each spouse to appoint someone to handle financial affairs if they become incapacitated. Spouses often name each other, but it is important to have an individual document in place detailing each individual’s wishes.
- Advance healthcare directive: This document designates someone to make medical decisions if a spouse is unable to do so. Each person may have different healthcare preferences, making separate directives necessary.
With all of this said, some couples with entirely shared assets and aligned wishes may prefer a joint estate plan, such as a shared living trust. However, even in these cases, distinct wills, power of attorney documents and health care directives are still advisable for a host of reasons.