Estate Planning for the Surviving Spouse

In addition to the post mortem estate planning that must be done for the descendent, the surviving spouse's estate plan and financial plan must be reviewed and updated.

Assets that were titled in joint tenancy (or in tenancy by the entireties) must be retitled. The assets can be retitled in the name of the surviving spouse, which is the normal procedure, or it may be preferable to title the assets in the name of the surviving spouse as Trustee of a self‑ declaration Trust. As discussed previously, a self‑declaration Trust can reduce the surviving spouse's probate expenses at death and provide for greater privacy with respect to the dispositive provisions of the estate plan as well as the identity of assets in the estate.

The surviving spouse's estate documents should be reviewed to be certain they are consistent with the descendant’s to the extent desired and take advantage of powers of appointment and other elections or specifically state that powers and elections will not be exercised, as previously discussed.

The surviving spouse should plan for lifetime needs, determine the level of income necessary and compare that with the level of income that will be provided by the assets available. The principal available to the surviving spouse should be taken into consideration in this calculation in order to determine the necessity of taking advantage of the elections available. This income planning should be coordinated with estate tax planning in order to be certain that sufficient assets and income will be available while at the same time minimizing the assets that will be exposed to estate taxation at the surviving spouse's death. It may be necessary for the surviving spouse to reallocate assets in an attempt to generate sufficient appreciation and income to pay the projected expenses. It may also become necessary to reduce expenses so the available resources will be sufficient.

Any outstanding debt should be reviewed and the repayment of debts should be considered as an investment alternative. If the cost of the debt (the rate of interest) is greater that the return on investments, it generally would be preferable to pay the debt in order to increase the net income available for expenses.

In addition, the need for life insurance on the life of the surviving spouse should be considered.