Married couples who consult with us frequently tell us they want an “I Love You” Will.  This is a will in which each spouse leaves everything to the other; then, when the surviving spouse dies, the remainder goes to the children.

An “I Love You“ Will sounds like a simple, reasonable approach to your planning. However, it fails to address many complications that life can throw at the surviving spouse, derailing your good intentions. Let’s talk about some of those complications and then move on to talk about better estate planning alternatives.

Possible Complications of the “I Love You” Will

Spouse Controls All After You’re Gone

We understand that you trust your spouse implicitly to leave the money to your children. When our attorneys mention that the “I Love You” Will does not prevent the surviving spouse from leaving it to someone else and not the children, our client usually insists, “My spouse would never do that!” And of course your spouse never would do that… now. But what about in the future? After you pass away, your spouse’s circumstances could be very different in five, ten, twenty years. Your spouse will be free to leave the assets to anyone.  Consider these possibilities:

• Your Spouse Could Become Mentally Incapacitated: If your spouse becomes mentally incapacitated, he/she could be vulnerable to undue influence and manipulation from someone who wants him/her to change the will; for example, a caregiver with nefarious motives who wants the money. Or your spouse may become incapable of responsibly handling money, frittering away assets intended for the kids. And if your spouse ends up in a guardianship, the guardian will control the money.

• Your Spouse May Remarry: If your spouse remarries, his/her new spouse will be entitled to 30% of the probated assets, unless the new spouse agrees to waive the right – which may not happen. If you are like most people, you are probably not keen on the idea of a new spouse inheriting the assets you wanted your children to inherit! In fact, the new spouse could even leave the assets to his/her own children, not yours. If the new spouse ends up as the survivor’s caregiver, he/she and their children could pressure the survivor to leave the funds to the new spouse, arguing that as caregiver, the new spouse is morally entitled to it.  The structure of the “I Love You” Will cannot prevent this from happening.  An Inheritance Trust may be a better fit if you want to keep your assets in your own bloodline.

Probate Will Be Required:  When you and your spouse have “I Love You” Wills, probate will be necessary when the survivor passes on. Probate adds additional administrative fees and can be a time-consuming hassle for your family. Moreover, probate does not afford privacy. It is a public process, meaning your will can be viewed by any nosy person who wants to know what you or your spouse left to whom.

Provides No Protection for Minor Children: The only way to protect minor children in an estate plan is by creating a will that names guardians for both your child (“the guardian of the person”) and for your child’s money (“the guardian of the property”). The structure of the “I Love You” Will does not allow for this. (Nor can it include plans for your pet’s welfare if it outlives you.)

Tax Planning Not Included: If you have significant assets, or are likely to have them in the future, estate tax and gift tax planning may be advisable. The “I Love You” Will offers no way to accomplish any tax savings.

Medicaid Eligibility Could Be Jeopardized: To receive nursing home Medicaid benefits in Florida, a  person may have no more than $2,000 in assets. If you pass away first and the inheritance you leave to your spouse pushes his/her assets above that level, he/she will be ineligible for benefits. If already receiving benefits, the inheritance will cause termination of benefits. A similar situation would occur if the surviving spouse dies and everything goes to a child who is receiving federal benefits. A Special Needs Trust can prevent an inheritance from taking a wrecking ball to federal benefits.

Your Child May Not Be Capable of Managing An Outright Inheritance: When the survivor dies, assets passing under the terms of the “I Love You” Will are transferred to adult children as a lump sum, no strings attached. This might be unwise if your child is fiscally irresponsible. Also, if your adult children have creditors, are being sued, or are going through a divorce, the inherited monies could be vulnerable.

Alternatives to the “I Love You” Will

The “I Love You” Will may be suitable for an elderly couple if they:

• Have few assets.
• Have long-term care insurance coverage so that Medicaid benefits will not be an issue.
• Have older, economically stable children in long-term stable marriages.
• Have all of their assets beneficiary-designated, or titled as joint tenants with rights of survivorship. In this case, the “I Love You” Will would be used merely as a safety net if circumstances change.

Married couples who do NOT meet these criteria should avoid the “I Love You” Will and rely on a more suitable estate plan. In many cases, the building block of a more suitable plan will be a revocable living trust or another type of trust with provisions to protect the assets going forward.

Waiting Is Not Wise

Clients who acknowledge the problems associated with the “I Love You” Will often tell us that when the first spouse dies, the survivor will then just revise the estate plan as necessary. But that never happens in many instances. If the survivor is at an advanced age, or ill, or grieving over the first spouse’s death, devising a new estate plan may be an overwhelming task and may never get accomplished. Moreover, if the survivor is not mentally competent when the time comes to revise the plan, he/she will not have the legal authority to change the plan. As you can see, it is better and more practical for a married couple to develop a plan together, while both have mental capacity and can provide emotional support and feedback to one another.

Call The Karp Law Firm for a complimentary estate planning consultation. With help from our experienced attorneys, you will devise an estate plan that works best for you under all circumstances, present and future. Reach us at 561-625-1100.