Today many couples in the U.S. are childless either by choice or circumstances. If you are one such couple, then you will think that you don’t need any estate planning as the assets will automatically be transferred to the spouse, however, you are totally wrong in this. Everyone needs to be assured about the fate of their assets and their loved ones. It is possible that the predominance of your financial legacy will differ from those of your parents.
As a childless couple, you want to be assured that your spouse is taken care of, a pet has a guardian, your likable charities are supported, and your wishes are respected and fulfilled. Also, you may also want to distribute your property among family members, relatives and friends as well. Hence, if you are a young couple or a retired couple, irrespective of the assets you own, here are a few things that you should know about estate planning:
1. A will is a must:
As childless couples don’t have natural heirs thus it is mandatory for them to have a written will. If you die without a will, your spouse will inherit your assets. If in case both of you die together or you die first and then your spouse, then it is uncertain who will get the assets and will be decided by the probate court which could either be your spouse’s relatives or any living relative and if there aren’t any then the assets will go the state. In this way, the family of the first spouse to die may be disinherited. On the other hand, you might want to give your assets to some friend or charity that the state is unaware of.
2. Power of Attorney:
This is an absolute necessity as it will help you during your lifetime when you will be unable to manage your assets during a severe illness or accident. Through this document, you can appoint a person to handle your affairs related to finance when you are unable to do by yourself. As the person will have a lot of unrestricted ability to act on your behalf, hence you need to be sure that you choose someone trustworthy. Generally, it is advised to have a durable power of attorney as it will be effective even when you are incapacitated.
3. Living will and health care proxy:
These are other mandatory documents. A living will specify what sort of treatment you would like to have and whether to prolong your life with medical care or not in case of a dire medical situation and you become incapacitated to tell this by yourself. A healthcare proxy is a person designated by you to make medical decisions on your behalf. Without these documents neither your spouse nor family member will have access to your medical records nor will they be able to decide for you.
4. Updating beneficiaries:
If you have a retirement account or life insurance policy, then the distribution of such assets after your demise will solely depend on beneficiary designation irrespective of what you have mentioned in your will. Hence, you must ensure that the beneficiary name in such accounts is as per your choice and must be reviewed and updated regularly.
5. Charitable donations:
Many childless couples think of donating to an organization that has enriched their life like your Alma mater or to some charitable organization working for society. To ensure such distribution of your assets, there are several types of trust such as charitable remainder trust which provides you income throughout your life, and after your demise, the balance goes to the charity of your choice. You can also opt for a charitable lead trust in which the income generated by the trust is used by the charity until you pass away and determine who will get the wealth.
6. Planning for pets:
Many childless couples have a pet in their family whom they love and care for like a child. If you are having a pet with you, it’s mandatory to plan for them as well as will take care of them when you are not there. In such cases, you can designate a person in your will to take responsibility for your pet. However, it may happen that the person is not willing to take responsibility. Hence, you must first discuss this with the person, and if he/she agrees only then should you designate him/her as your pet’s guardian.
If you are living without children, you must be busy enjoying your life, spending on yourself without worries. However, you must be aware of the fact that childless couples need an estate plan as much as required by couples with children. So don’t postpone or delay it further. Talk to an estate planning lawyer and start planning today.