Money Talks | January 2016

Where there’s a will …

By Melissa Myers and Michael J. Tucker, January 2016 Issue.

Melissa Myers: Happy New Year! In 2015, we spent a lot of time discussing how same-sex marriage has changed the way we look at our relationships and families from a legal standpoint.

Michael J. Tucker: We’ve talked about various steps newly wedded couples could consider to adjust to their now legally recognized marital status.

Myers: One of the realities we mentioned is that these changes don’t all happen automatically. And reviewing some of these options would be wise New Year’s resolutions.

MoneyTalks_WILLTucker: I help a lot of clients with their wills, powers of attorney and trusts. As they are getting married, they are coming in to update these important documents to reflect the marriage.

Myers: Smart! Conversely, a number of couples have told me, “now that we’re married, all of our legal and financial problems are solved and we won’t need all that advice and paperwork any more.”

Tucker: I’ve heard a number of variations on that theme as well. Unfortunately, that analysis stops short.

Myers: It does seem that, in the media and in our culture, generally, marriage has been oversold as a cure for all evils.

Tucker: Marriage actually creates some complexities while it resolves others. Some of our newly married same-sex couples have had a deer-in-the-headlights moment when it comes to their children from previous relationships.

Myers: They are presuming that because they are married now, if one spouse dies, everything will automatically go to the surviving spouse?

Tucker: That’s a dangerously incomplete analysis if either of them has a child or other descendants.

Myers: That parent needs a will to set forth that everything goes to the surviving spouse, if that is his or her intention.

Tucker: Otherwise the children would be entitled to half of their parent’s separate property and all of their parent’s share of the community property.

Myers: In Arizona, community property basically means that all acquired assets and income earned during the marriage (including paychecks) are jointly owned by the married couple.

Tucker: The exceptions are gifts and inheritances, as well as whatever each of them acquired or earned before they were married to each other.

Myers: The point is that getting married will change some of the legal relationships between the couple as well as between the couples and their assets and their debts.

Tucker: Another issue arises for someone who’s married and has indicated in a will that they’re leaving a portion of the estate to the surviving spouse and the rest of the estate to children or other non-spouse beneficiaries.

Myers: At first blush it sounds pretty clear.

Tucker: During estate administration, there could be differences over whether particular assets are part of the estate or not. The children may claim that certain assets are part of the estate, while the surviving spouse may claim ownership in the same assets.

Myers: So even though the will might be clear, there could be disputes over which assets the will governs.

Tucker: Yes. And in the case of bank accounts and brokerage accounts, those disputes aren’t easily resolved by looking at how the account is titled.

Myers: Account titling is not determinative of whether there is a community property interest in the account.

Tucker: That goes for real estate titles as well.

Myers: Sounds complicated.

Tucker: It’s a good idea to look carefully at financial and legal arrangements and how marriage might impact them.

Myers: That goes double for families with children.

Tucker: Yes! And the New Year always serves as a reminder to make sure any changes in the previous year are addressed and updated appropriately.


Editor’s Note: This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax or legal professional regarding their individual situation. Neither Camelback nor Commonwealth offers tax or legal advice.


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