Introduction
When drafting a will, some states give you the option of writing a joint will to cover you and your spouse (note that Arizona does not recognize joint wills). Rather than writing two separate documents, this singular solution dictates the transferal of assets to the surviving spouse when the first spouse passes away, then how the estate will be distributed upon the surviving spouse’s death. For example, when you pass away all assets will be transferred to your spouse, then when they pass away, the estate will be distributed among your beneficiaries. The instructions are typically universal, meaning that regardless of which spouse passes away first, the transfer of assets will be identical.
At face value this may seem simpler than drafting two separate wills, but more often than not, joint wills can cause significant complications. Most experts in estate planning recommend drafting individual wills instead.
Disadvantage of a Joint Will
Spouses or partners rarely pass away together, so it’s likely that one of you will outlive the other, either for a few months, a few years, or possibly longer in the event of an untimely demise. The biggest challenge with joint wills is their inability to adapt to any necessary changes that might arise during this period.
Since a joint will can only be altered with the consent of both parties, the will is essentially etched in stone upon the first spouse’s death. Before then you will be free to update the will as often as you’d like; after that, your surviving spouse will be unable to make any changes to the will. The personal representative nominated to manage your estate, the beneficiaries, and the distribution instructions will be locked in.
Advantage of a Joint Will
The biggest advantage of a joint will is the assurance that your assets will only be distributed to your spouse and your posterity. If your spouse remarries, the new spouse and any children from a previous marriage would not be able to inherit your assets.
In short, a joint will ensures that only your posterity inherits your assets, but it trades that assurance for your spouse’s inability to make any necessary changes after your death.
What are Some Examples Where a Separate Will is Preferable vs. a Joint Will?
The greatest challenge of a joint will is the inability to make changes to the document after the first spouse passes away. Following are five examples of major events that could necessitate altering a will after the first spouse’s death, and which would be difficult to handle with a joint will.
The Surviving Spouse Remarries
If your spouse gets remarried after your passing, a joint will would make it particularly challenging for him or her to merge their assets with the new spouse. It would also keep the surviving spouse from adding new children or posterity as beneficiaries, and can be a major source of contention within the new relationship. In this case, utilizing individual wills would be preferable. If you’re concerned that you don’t want your share of the assets to pass into a new relationship, you can dictate that in your will, and split the estate appropriately upon your death. Otherwise, you can use your individual will to direct all assets into your spouse’s name upon your death, and your spouse will be free to direct those assets, regardless of whether they remarry.
An Heir or Beneficiary Passes Away
No parent should live to see their children or grandchildren pass away, but it unfortunately happens. Such situations usually necessitate altering the distribution instructions in the will. This can be difficult, however, if one spouse has passed away and the surviving spouse is bound by a joint will. By setting up individual wills, the surviving spouse would be better equipped to alter their will based on untimely deaths, and redistribute your assets among your surviving posterity.
The Birth of New Children and Grandchildren
Depending on their age, your surviving spouse may have additional children in a subsequent relationship. For older couples considering the merits of a joint will, the birth of new grandchildren and great-grandchildren may be more likely. In either situation, the arrival of new heirs and beneficiaries may warrant altering your will. As stated before, a joint will could complicate this if the surviving spouse is unable to adjust the allocation percentages and instructions in the document. You could request that your beneficiaries voluntarily pass some of their inheritance to the new family members, but after your death, there would be no obligation to do so. Also, if the size of their inheritance is substantial, any funds that they pass to others may be subject to gift tax restrictions.
Changes in Tax or Estate Laws
The political landscape is always changing, and tax and estate laws are frequently altered by different administrations. The current estate tax threshold is $5.49 million, but it’s entirely possible that in the next 5, 10, or 20 years that number could rise, fall, or perhaps even disappear (the last “tax haven” year when the estate tax was temporarily repealed was 2010). Having individual wills would allow your surviving spouse to alter the joint estate’s organization and distribution if necessary to minimize tax consequences. A good estate attorney will hold regular account reviews to address this issue, and altering an individual will would be relatively simple.
Problems Probating the First Estate
While a properly drafted joint will should unfold just fine when the first spouse passes away, it’s not uncommon for unforeseen issues to arise during the initial transfer of assets to your spouse (known as probate). Even with a good will, probate can be a long and long process, complicating the transfer of your assets. Since there is no way to alter your will after you die, that could leave your surviving spouse and beneficiaries in an unfavorable predicament during the first probate. Any solutions to that predicament will likely require additional legal assistance, costing your surviving spouse more time and money, at a time already made difficult with grieving your passing.
Family Discord Necessitates Disinheriting an Heir
While this situation is rare, this certainly happens. Whether it’s a desire to not fuel an heir’s unhealthy addictions, or a dispute between family members that cannot be resolved, there are plenty of circumstances that can give rise to this. A joint will essentially locks in the heirs and beneficiaries when the first spouse dies, and would make it near-impossible to disinherit an heir.
For long-term peace of mind, contact us to set up a consultation today. We look forward to helping with your will and other estate planning needs.
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