Young married couples tend to avoid thinking about the death of a spouse, but estate planning is an important duty of both husbands and wives.
Newlyweds don’t tend to about widowhood, but husbands and wives might best show their love by preparing each other for the death of a spouse.
Older married couples are more likely to create wills and trusts, and undertake other aspects of estate planning, according to Millionaire Corner research, and as a result older investors say they could cope with widowhood. More than 95 percent of investors age 60 and over say they are confident they could take over the finances upon the death of a spouse, according to a January survey.
Younger marrieds – those age 40 and younger – are less confident they’d be able to take over in the event of an untimely death. About 63 percent said they were confident they could take over the family finances upon the death of a spouse
Most young couples avoid thinking about the death of a spouse, but U.S. Census data shows that widowhood at a young age is all too common. Roughly 1.14 million Americans younger than 40 reported being widows or widowers, according to the bureau’s 2009 American Community Survey.
The financial consequences of young widowhood can be disastrous, particularly when the surviving spouse is left with dependent children. Husbands and wives can take steps to ensure their spouse is provided for in the case of untimely death by creating wills and trusts, and purchasing appropriate life insurance policies. Employee-sponsored retirement plans, Individual Retirement Accounts and annuity products can also benefit a surviving spouse named as beneficiary.
The vast majority of older investors say they have established wills, but younger investors – who may be the most vulnerable to the untimely death of a spouse – are likely to postpone the process, according Millionaire Corner research. A fourth quarter study of Main Street investors – those with $100,000 up to $1 million- shows that 89 percent of those ages 65 and older have a will, compared to 53 percent of investors age 54 and younger. The older investors are more than twice as likely to have created trusts
Couples who fail to create wills and trusts are foregoing powerful estate planning tools that can provide for a surviving spouse and children. A will allows an individual to appoint a guardian to care for minor children and also designate who will inherit his or her property. A trust can provide valuable tax benefits to a surviving spouse. Trusts can also shelter an estate from lengthy, expensive and public court proceedings. Trusts circumvent probate court by transferring title of property to a trustee, who is instructed to distribute property to beneficiaries upon the death of a spouse.