Postnuptial Protocol

     Whether you have just tied the knot or just celebrated your Golden Anniversary, it is never too soon (nor too late) to get your legal house in order as a couple. In this article we review some fundamental legal tools and techniques that are must-haves for every married couple.

Durable Powers of Attorney

     Many married couples mistakenly believe that upon exchanging vows they are granted blanket legal authority to carry out their mutual pledges to care for one another in sickness and in health. Unfortunately, the law requires further and more specific written legal authority. If one spouse is incapacitated due to an illness or an injury, then this becomes painfully apparent.
     Each individual American is responsible for making his or her own personal, health care and financial decisions. When incapacity strikes, that responsibility does not end. But who will make these decisions? Bottom line: It will either be someone appointed by you in advance, or someone appointed for you by a judge in the probate court. Hint: Hiring an attorney to prepare a durable power of attorney to appoint your spouse as your agent is likely much less expensive than having a judge (plus the two additional attorneys required) involved in the court process ... to eventually appoint your spouse anyway.
     A durable power of attorney may be prepared to cover both financial and health care matters in one document. Alternatively, separate documents may be created with one for financial and the other for health care. While you are at it, remember to prepare a living will or health care treatment directive to provide clear and convincing proof regarding your end-of-life treatment wishes.

Wills & Trusts

     Once you have made arrangements to care for each other in the event of incapacity, make arrangements for the transfer of your assets to one another upon death. These transfers may be outright or in trust. Do not forget to also make arrangements for any eventual inheritance that may be left to your children. Sometimes it is wise to protect an inheritance both from and for your children. Testamentary trusts, whether established under a last will and testament or under a revocable living trust, can provide considerable inheritance protection for your children from potential divorces, lawsuits and bankruptcies.

Estate Tax Savings

     Properly drafted credit shelter trusts can save more than $800,000 in unnecessary federal estate taxes. The emphasis is on the word unnecessary.
     Fortunately, the Internal Revenue Code authorizes each person to exempt up to $2 million from federal estate taxes. However, this tax exemption is not automatic. Many couples fail to protect the full $4 million allowed because they overuse the unlimited marital deduction by leaving everything outright to the surviving spouse. Careful planning is required to fully maximize federal estate tax savings. This is not a do-it-yourself project. Retain appropriate legal counsel regarding your options.