We often help a widow or widower plan her or his estate. Very often their goals would have been much easier to accomplish had the couple come in while they were both alive and well.

I get it. Going to a lawyer to talk about death and dying is not your idea of a good time. It is harder than ever if you are seriously ill. Then, once you lose a spouse, you probably don’t want to go spend time with such a lawyer. Two points you need to hear, loud and clear:

Why do we not do the first?

While they are both living, Mr. Ostrich might say, “When I die, I want her to get everything, and I trust her to pass it on to the kids.” So, to avoid spending time and money with an estate planning attorney, he and his spouse hold all real estate and bank accounts in joint tenancy with rights of survivorship, and they name each other as beneficiary of their life insurance and individual retirement accounts. This way, upon the death of either of them, everything seems to pass automatically — without any legal action to be taken — to the survivor.

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And this all seems fine to Mr. Ostrich. His plan is simple and straightforward. He wants her to benefit from his estate before it passes to the children, and he trusts her to plan as necessary to give it to them. His assets pass to her without probate. There is no estate tax on assets passing to a spouse. Everything seems to be going according to Mr. Ostrich’s wishes. His widow, as the surviving joint owner and beneficiary on the various accounts, receives it all without probate court. She is pretty happy, since there seems to be no need to spend any money on a lawyer.

However, not all is as it seems.

Big tax losses

Every Illinois resident has an estate tax exemption to pass up to $4 million to heirs. But if Mr. Ostrich left everything to his widow, he wasted his $4 million exemption. Their entire combined estate — 100% of the farm, savings, equipment, life insurance, etc. — will have to pass from her to the children. She has only her exemption to cover it. If it is worth more than $4 million at Mrs. Ostrich’s death, there will be substantial estate taxes to pay.

When Mr. Ostrich dies, leaving his widow as joint owner and beneficiary on the various accounts, is there anything that could be done to save his tax exemption? In most cases, yes.

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Widow Ostrich needs to get to the attorney before she accepts any benefits of the joint property and before she claims the life insurance or IRAs. This will seem awkward, especially when the joint property just seems to instantly belong to her, and the insurance and investment advisers are being so helpful to provide the claim forms, ready to sign. They might even be explicitly saying, “There is no need to hire an attorney.”

The legal tool that she should at least consider is called a qualified disclaimer. She can disclaim — instead of claim — what Mr. Ostrich left her. What she disclaims will pass as though she predeceased him. Usually, this means it will go through probate court and pass to their children. This allows those assets to use his estate tax exemption instead of hers.

Is that optimal? No. To get the estate tax result, the widow has to give up the disclaimed assets. Disclaiming is not a plan. It’s a football Hail Mary after time expired.

Had they planned ahead, Mr. Ostrich could have achieved the same tax result and ensured that his widow would get all income and principal as needed. He could have planned so what he left her would be protected from adverse claims she might encounter, such as a lawsuit or costs of nursing home care. He could give her broad control of everything, but not so much control that if she remarried, it could go to her new husband.

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Don’t stick your head in the sand. Love each other enough to plan together. You can take better care of each other and maximize tax benefits at the same time.