Estate planning without kids is very important and raises unique issues to address. If you and your spouse don’t have children, the focus of your financial legacy may be quite different from what it would be if you were parents. In fact, due to changing demographics, families often have less children than before or no children. However, couples often ignore planning as they think they do not need to plan without kids.
Motley Fool’s article, “5 Estate-Planning Tips for Child-Free Couples,” suggests that you may want to leave some of your money to friends, family members, charitable organizations, or your college. No matter the beneficiaries you choose, these estate planning tips are vital for couples without children.
- A will. You need a will because couples without children don’t have natural heirs to inherit their wealth. If you die without a will, your assets also may not go to your spouse. The state intestacy laws determine which of your family members inherit from you, especially if neither of you have wills. The family of the first spouse to die may be disinherited. All of this can be eliminated by having a will directing your inheritance to beneficiaries of your choosing.
- A power of attorney. Who will make financial decisions for you, if you and your spouse become incapacitated? You can select a person to do this with a power of attorney (POA). You can name a person to pay bills, manage your investments and handle property matters, if you’re unable to do so yourself. Failing to do so may require an expensive guardianship. You also very much need medical powers of attorney so that someone you know can make medical decisions for you if you and your spouse cannot.
- Up-to-date beneficiaries. If you have retirement accounts or life insurance policies, the distribution of the proceeds at your death is made by a beneficiary designation, not by your will. A frequent beneficiary error is not keeping those designations current.
- Give money to charity now. You may think about leaving your assets to organizations that have enriched your life. You can set up a trust to be sure that your money goes where you want. Work with an experienced estate planning attorney to accomplish this.
- Remember the pets. If you have furry children, plan for their care when you’re not around to tend to them yourself. You can also put money into a trust specifically intended for the animal’s care or designate an organization that will provide lifetime care for your pet with money you earmark to that purpose as well as name a caretaker to care of the pet after you are both gone.
Remember that estate planning without children is needed just as much as planning for couples with children, and maybe even more. Considering these issues will help ensure you are protecting in your own estate plan and your inheritance goes to the beneficiaries you choose.
Reference: Motley Fool (September 9, 2019) “5 Estate-Planning Tips for Child-Free Couples”