Estate Planning for Couples 101: Conflicts, the Power of the Survivor, Contractual Wills and Joint Versus Separate Trusts

For estate planning attorneys, the initial consultation with spouses can have some awkward moments to say the least.  Unlike with unmarried individuals, there is typically no diving directly into the minutia.  First, the attorney must recite a rather robotic disclaimer that, while one attorney representing both spouses with respect to their estate planning is rather common, it is indeed a conflict of interest from a professional responsibility perspective.  The attorney may go on to say that each spouse has the right to obtain separate counsel, and that such action is advisable, but offer to proceed with representing both spouses if they are willing to waive this conflict and sign an informed written consent to that effect.    In some cases, if information is known by the attorney about prior marriages and separate biological kids, the attorney may decline to represent both spouses even if a waiver is signed.     

This all may seem very strange to spouses who, if sitting down together with the same estate planning attorney, likely have the same goals and consider their interest to be aligned.  But once the attorney delves into the nuances of estate planning and the couple really begins to consider a future where one spouses survives the other, it will all make sense.  There is quite a spectrum. On one extreme, on the sporadic occasion where I am handling estate planning for high school sweethearts, now in their 80s, married for 60 plus years, with two biological children of the marriage, I generally feel quite confident that a conflict of interest will never arise during the representation.  On the flip side, there are couples on their second, third or fourth marriage, both with children from prior relationships where I often decline representing both spouses except in special cases, even with a waiver.  But even for younger couples on their first marriage with kids only together, I have had many awkward meetings where one spouse blurts out something to the effect of “what if I die and you marry someone else?” or “what if we get divorced?”  While these are great questions for the purposes of estate planning, these matters are not often discussed in relationships, and the other spouse seems quite taken aback that their mate made such a comment.  And, so it goes, the estate planning attorney must then calmly discuss these scenarios and what it would mean for their estate plan.  Here, I will discuss several of the important nuances of estate planning for couples and why there is an inherent potential for conflicts of interest. 

First, many couples come to an estate planning attorney to create their Last Will and Testament.  On numerous occasions, I have couples who do not initially understand that a Will can only be made by one individual.  In other words, two people cannot have one Will.  In many cases, however, spouses opt to have what is colloquially called “Sweetheart Wills” where they leave their assets to each other if the other has survived them and to their kids if the other has predeceased them.  That all sounds well and good, right?  Well, maybe, but the mechanics of this are much more complicated.  It is much more likely for one spouse to outlive the other for a significant period than for spouses to die simultaneously or even within the same few months.  A person’s Will is not effective until death, meaning that it can be revoked and changed an unlimited number of times prior to death so long as the person has capacity.  That is why it is called a “LAST” Will and Testament.  Your Last Will and Testament is the last valid Will made prior to dying.  Accordingly, with “Sweetheart Wills”, the surviving spouse can dictate the ultimate disposition of the couple’s estate because the estate is left to the surviving spouse who can, after the death of the first spouse to die, change their Will and leave the entire estate to whomever they so choose.  If the surviving spouse gets remarried or has kids with someone else, they may be inclined or, let’s call it pressured, to change their Will.   Here arises the inherent conflict.  If an attorney prepared “Sweetheart Wills”, they could not assist the surviving spouse with changing the estate plan and leaving the assets to a subsequent spouse because it would be a conflict with the interest of the deceased spouse’s wishes who was also their client.  With that in mind, there is such thing as a contractual or joint Will where a couple makes a binding agreement not to change their Will without the consent of the other.  While this may sound like the magic bullet, it also has many drawbacks.  Primarily, there are many good reasons to change a Will after your spouse’s death unrelated to a subsequent relationship or new child, such as estate planning strategies and the death of a beneficiary named in the Will.

The most optimal way for couples to create an estate plan, especially in cases of separate biological children, is to create their own separate trusts.  By doing so, they can leave a lifetime interest in their assets to their spouse to be managed by an independent trustee and the remainder to whomever they want.  This allows both spouses to ensure that their assets will end up where they choose.  However, there may still be conflicts in determining which assets originated with which spouse. 

Many couples create a trust together, but often, the attorney does not stress the importance of separate trusts for protection against post-mortem changes to the estate plan.  For example, the standard revocable living trust many couples use in their estate plan for the avoidance of probate among other things, where both spouses are the grantors i.e. creators, provides little to no protection against changes to the estate plan by the surviving spouse.    These types of trusts often purport to create separate sub-trust at the death of the first spouse, but from a practical standpoint, unless the surviving spouse retains an attorney to do the leg work of segregating assets at the death of the first spouse and funding separate trusts, this type of language carries little value.  In my experience, it is almost never done.  Additionally, most of these types of trusts provide the creators the unilateral power to change the beneficiaries.  With separate trusts, each spouse has their own control over what is agreed to be their part of the pot, so to speak, and their spouse can never change it, even after their death.    

In summary, competent estate planning can be completed for spouses through the same attorney but it is important for spouses to understand the limitations.  We do not typically think of estate planning in an adversarial sense, but the duty of an attorney is to zealously represent their client.  When an attorney represents both spouses in estate planning, they are more of an impartial draftsman and mediator and less of an advocate.  The attorney may have a strategy that would be best to protect one side of the family’s interest or assets; however, they would be unable to vocalize that strategy to the relevant spouse in private, if representing both spouses.  Spouses should consider these limitations before deciding whether to use the same or separate estate planning attorney.   

If you need an estate plan, please call our office to speak with one of our attorneys. 

Estate Planning & Admin