I was perusing the MSN Money website, as I often do in the middle of the day, when this article caught my attention:
Marriage Means Updating Vital Papers
This is a point worth repeating. We all have various places where beneficiaries are designated (and if we don't... we should!). This includes things like life insurance policies (all of them, including the little term ones you get with your credit cards or policies you have through work/clubs/organizations/etc.). It also includes your retirement accounts: IRA, 401k, etc.
How did you take title to your home? Did you take it in the name of a living trust? You need to update that trust when you get married, have kids, etc. This is not something you want to neglect!
What if you don't hold title to your home in a trust? My advice is to talk to an attorney and consider whether it might make sense for you. Many people think their heirs are taken care of by having a will. A will helps, but it doesn't help your heirs (in other words, your grieving spouse and kids) to avoid the lengthly and expensive process of probate.
When you hold assets like your home in a living trust, what happens when you die is that ownership of those assets is automatically passed on to the beneficiary(ies) of that trust. If you hold title outright and succession is determined by a will, then everything has to go through a probate court first. The costs of that process come out of the assets of the deceased, meaning you're leaving more of your money to attorneys and the US court system, which I'm pretty sure is not your goal.
Another thing you want to look at, especially with your life insurance, is setting a secondary beneficiary. This is different than just splitting share between primary beneficiaries. In that case, if for example you were designating all your kids to split the payout on your life insurance policy, you would name each of your children as primary beneficiaries, and assign them a share. But in the event that your primary beneficiary was suddenly out of the picture (say, if you designated your spouse as primary beneficiary, and you both died simultaneously or your spouse preceded you and you didn't get around to updating your forms), then you would want someone designated as secondary beneficiary(ies). Otherwise the value of the insurance payoff would revert to your estate and suddenly be subject to estate taxes and probate, which is something you'd want to avoid.
Of course, I'm not an attorney, so you should find an experienced estate attorney and talk to them about your situation.
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