June carries us into the height of wedding season and what a treat it is to attend weddings in person again – to laugh, dance, and hug with friends and family! Marriages are a wonderful union between two people who want to share their lives with one another. Sharing lives also means sharing finances, property, debt, and all of the other things that usually take a backseat to guest lists and tie colors. But just like newlyweds plan the seating arrangements at the reception so that Aunt Barb and Uncle Jack aren’t sitting too close to each other, they need to consider planning for their futures together.
With many more couples cohabitating before marriage than ever before, day-to-day life may feel the same post-ceremony, but in the eyes of the law, marriage changes a person’s relationship to their assets. While we can’t say for sure marriage changes someone’s ability to put the toilet seat down or pick up their dirty socks off the floor, there are some changes you can anticipate:
Community property. Louisiana is a community property state. This means spouses equally share the income, assets, and debt that either acquires during marriage, with certain exceptions for property purchased with separate funds, inherited property, or property gifted to an individual spouse. Additionally, any income produced from a spouse’s separate property becomes community property. This is a huge difference from most states where community property law doesn’t exist and it could have some unintended consequences. While community property is the default setting in Louisiana, with proper planning spouses can decide to opt out of Louisiana’s community property regime.
Prenuptial agreements. Before the wedding, it is relatively easy to opt out of Louisiana’s default system of community property by agreeing in writing to a different system. Even though it’s not as romantic as a moonlit stroll on the beach, signing off on a prenuptial agreement can ensure that the spouses’ assets and debts stay separate from each other, so that neither person’s past financial blunders cause the other one grief going forward. This may be extremely important and should be addressed well in advance of the wedding date.
Intestate order of succession. Many people are shocked to find out that Louisiana’s intestate order of succession (or plan for who inherits property) does not always provide that a surviving spouse receives property when the other spouse passes away. This means if a husband passes away, his half share of whatever he owns with his wife may go to his children, siblings, or even parents before his surviving spouse. The law stipulates that the wife may have a right to use the community property (called a usufruct in Louisiana), but without the husband having a will that leaves the property to her, she may not own it. So, for most married couples, a will is necessary.
Beneficiaries. If you own an insurance policy, annuity, or retirement account, it requires you to name a beneficiary to receive the policy or account at your death. You will want to review the beneficiary designations on all of those policies and accounts shortly after marriage to make sure your new spouse is listed as your beneficiary if that is who you want to receive the policy proceeds or money. Even if you don’t want your spouse to receive your 401(k), there may be rules that require that type of account (and other accounts governed by ERISA) to pass to your surviving spouse.
In light of these changes that occur at marriage, couples need to have a discussion about the goals they have for their shared future. No planning can take place in a vacuum or based on assumptions without asking questions. Couples considering planning for themselves and for loved ones needs to start by listing their goals and getting them written down. Ultimately, their estate plan should reflect these goals and priorities. (While this is true of newlyweds doing estate planning, it is even more important in non-traditional families and for newlyweds who have children from prior marriages.)
Married couples know that marriage takes work. However, planning ahead of time can greatly reduce some of the heavy lifting spouses face later down the line when one spouse becomes ill or incapacitated. Ensure that your loved one is provided for and that your own wishes are made known by taking the time to discuss your goals as a couple and visit with a well-qualified estate planning attorney to get a plan made that reflects those goals and wishes.
The information provided is not intended to be legal advice and does not constitute any attorney/client relationship. You should consult with an attorney for individual advice regarding your own situation.
Ms. Melancon is an attorney with Legacy Estate & Elder Law of Louisiana, LLC with offices in Baton Rouge, Lake Charles, and New Orleans. The primary focus of her practice is estate planning, probate, special needs planning, and elder law. For more information or to attend an upcoming estate planning seminar, call her office at (225) 744-0027.
