A joint will is often drafted by married couples to distribute their assets and properties. Couples usually have the same goals for the future and hence agree on a joint will. However, while it is possible to get a joint will for estate planning, lawyers mostly advise against it.
Joint will have specific rules that state if one of the spouses dies, the assets and estate automatically go to the surviving spouse. And when the second spouse dies, the estate goes to their children. Married couples find this way of estate planning easier and cheaper because they do not want two separate wills when they both have the same goals for the future.
The most common problem that arises with joint wills is that they cannot be changed after one spouse dies. In most cases, the surviving spouse does not have the power to change or alter the will without the second spouse. Whatever happens after one spouse’s death, the rules of the estate plan will remain the same.
Even if the surviving spouse remarries, they cannot include their children from the second marriage in the joint will. Similarly, they cannot remove anyone from the inheritance or sell the estate or the assets. It does not matter if the spouse wants to sell some part of the estate to meet their living expenses during hard times; a ‘joint will’ cannot be altered.
The living spouse cannot add executors or beneficiaries in the joint will. The beneficiaries that were born after the joint will was decided cannot also be included. The time for inheritance is also fixed and cannot be changed if one of the spouses has passed away.
Apart from that, joint wills are not legal in some countries. Many courts and judges often separate the joint will for both spouses or declare the whole joint will invalid in some states. And in many cases, the assets and properties get tied up in the joint will for years. This can cause many problems for the living spouse.
Bankruptcy may seem like losing all your essential assets, but it is not the same as bankruptcy. Although bankruptcy significantly affects your retirement plans, it does not mean that you will lose everything you have saved for your retirement. A retirement account or retirement fund is very different from other savings or investment accounts and can be saved for your future personal needs.
There are many ways you can deal with your retirement accounts when it comes to bankruptcy. In most cases, you can keep the retirement account separate from the whole procedure. In other cases, your savings are invested in insurance or held in trust.
The government usually protect your retirement fund, but if you take money from a retirement fund and place them in a different account, the rules applied to them will change. The money that you withdraw from the retirement account will be treated as income for your debts. Hence, it is advised to refrain from withdrawing money from your retirement fund until after your bankruptcy.
You can also use bankruptcy exemptions to save some of your property, funds, household belongings, and some basic necessities to live after retirement.
Although the funds in your retirement account are exempt from creditors, the benefits paid as income are not discharged. Under chapter 7 bankruptcy, the court cannot take your retirement benefits and pensions and consider them as income. However, the court can take some amount from your retirement benefits for your own support and pay off some portion to your creditors.
Under chapter 13 bankruptcy, the court decides the amount of money to be paid to your creditors monthly on the basis of the total amount of retirement benefits or pensions you are receiving. This is done only for the debts that you must repay under your repayment plan.
Keep in mind that general saving accounts, stock option plans, and investment accounts are not the same as retirement accounts and are not protected from the court. Court has the authority to utilise your unprotected accounts to pay your creditors and essential debts under your repayment plans.