Most married couples name each other as beneficiaries in their wills. While this approach may make sense when both partners are young and healthy, it may not later in life.

Unintended consequences can happen when older couples do not review and make appropriate changes to the estate plans they had in place when they were younger.

Estate planning for older couples

Older couples need to do more than plan their estates. They also need to plan for disability. Here are some examples of things that can go wrong when couples do not plan for disability:

  • If the beneficiary of a will is living in a nursing home when he or she receives assets, those assets may be exhausted paying for nursing home expenses.
  • An incapacitated person may not be competent to make decisions under a power of attorney. This could lead to the need for a guardianship proceeding to determine who should make decisions.
  • A will may not provide tax or other advantages you could find in another type of estate planning document, such as an irrevocable life insurance trust.

There are many ways your estate planning can help you prepare for contingencies. For example, one partner may suffer from dementia, while the other partner remains healthy. However, just because one partner is healthy now does not mean that he or she will live longer. If the healthy partner dies first, assets and decision-making could go to the incapacitated spouse.

While you may assume an older child can step into the shoes of an incapacitated spouse, that may not be possible. Your family may need to go through a humiliating court proceeding to prove that the incapacitated partner is not competent to make decisions.

To protect your beneficiaries from unintended consequences, review your estate plan when you get older and make appropriate changes.