For newlyweds, one of the most important tasks to attend to is estate planning. The estate planning will depend on what form of marriage they are in. Keep the following in mind:
Marriage in community of property
There is a joint estate, with each spouse having a 50% share in each and every asset in the estate.
- In the event if the death of one spouse, the surviving spouse will have a claim for 50% of the value of the estate, the estate is divided after all the debts have been settled in a deceased estate.
- When drafting a last will and testament, spouses married in community of property need to be aware that it is only half of any asset he or she is able to bequeath;
- Upon the death of one spouse, all banking accounts are frozen (even if they are in the name of one of the spouses), which could affect liquidity.
Marriage out of community of property
Each estate planner (spouse) retains possession of assets owned prior to the marriage. Each spouse’s estate is completely separated, even in the event of death. It you want your spouse to inherit something, you would need to outline this in your Will.
Marriage out of community of property with the accrual system
This is identical to a “marriage out of community of property”, but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smallest estate once the marriage comes to an end through death or divorce.