Reciprocal Last Will and Testaments, sometime called “I Love You” Wills, is an estate planning device that allows married couples to easily leave their entire estate to the other spouse in the event of death. To decide if a Reciprocal Will is right for you and your family, consider the potential benefits and pitfalls that come with this legal device.
Low Cost Planning
A Reciprocal Will can allow for fast and inexpensive planning. You and your spouse will each create simple Wills that state the other spouse inherits all. If you are looking to save money during the estate planning process, this is a good way to do so. Beware; however, a Reciprocal Will does not fit every family’s situation.
Good for Underage Children
If you and your spouse are the parents of all children in your household and all children are underage, a Reciprocal Will may be the easiest way to handle your children’s inheritance. You cannot leave an inheritance to a minor for his or her own control. With an “I Love You” Will, it is usually assumed that the living spouse will pass on the estate to the children. For this reason, creating a separate inheritance for each of your children may not be necessary in your early years of estate planning.
May Disinherit Family Members
One major disadvantage to a Reciprocal Will is that it can cause family members to be disinherited. When your spouse inherits your entire estate, he or she will decide who inherits next. If your spouse is not the biological parent of your children, you run the risk of having your children disinherited. Your spouse will be able to leave the estate to whomever he or she pleases including his or her own biological children or even another spouse if remarriage occurs after your death.
If you have a blended family, avoid a Reciprocal Will and focus on an estate plan that includes every family member.
Estate Tax Concerns
An “I Love You” Will, will not allow your family to take advantage of basic estate tax savings on the death of the second spouse.