Does Estate Planning for Childless Couples is still applicable? Many people think of estate planning for people with spouses and children. Estate planning allows you the freedom to structure your wishes for your estate, your health and your death. These issues are important to everyone and don’t depend on the structure of your family. In fact, childless couples tend to have greater financial wealth that needs to be planned for. US News wrote an article titled, “To Retire Early, Don’t Have Kids”, in this article the argument is made that without children a person has far greater financial resources to retire. In order to control what happens to your hard earned wealth and assets start planning now. Estate planning for childless couples is just as important as planning for people with children or dependents.
Estate planning gives you the ability to plan your asset distribution. Working with a skilled estate planning attorney you can create a will or trust to dictate how your assets should be distributed. You may have a beloved niece or nephew or friend from high school that you would like to name as a beneficiary, be sure to include these loved ones in your estate plan. You are able to decide how much to give each beneficiary and the terms of when each person will receive his or her inheritance. It is important to work with a skilled and experienced professional so that there are no errors or gaps in your estate plan. Your estate planning attorney can also help you structure your estate plan so that your beneficiaries are as tax efficient as possible. You don’t want the bulk of your financial gift to be diminished by taxes if it can be helped. You will also want to appoint a trusted executor to help ensure your wishes are carried out when you’re gone. The role of an executor is explained by Bernard A. Krooks in his post “Understanding the Role and Responsibilities of an Executor“, “An executor (also called a “personal representative” in some states) is a person named in a will to carry out the wishes of the deceased person. An executor typically offers the will for probate, takes action to protect the assets of the estate, makes distributions of property to beneficiaries and pays the debts and taxes of the estate.” The executor you appoint will have numerous responsibilities and should be willing and capable of fulfilling these duties. You should discuss your estate plan with your executor and make sure he or she will accept the duties that come with the position.
Charitable causes can be a part of your estate plan. If you have a favorite charity or cause that is near and dear to your heart consider including it in your estate plan. It is important to have the correct information for your charity including the legal name and tax ID number. You also have the ability to make your gift to the charity restricted. This means you can designate how the money is spent by the charity. If you decide to make a limitation on the gift be sure that you do not create an undue hardship on the charity you are trying to benefit. You can also create a charitable remainder trust or CRT for short. This trust can be part of your long term estate planning. It is described at “Charitable Remainder Trusts” as, “ an irrevocable trust that generates a potential income stream for its beneficiaries, with the remainder of the donated assets eventually going to one or more charitable organizations.
- Potential immediate (partial) tax deduction, based on the value of the remainder gift to charity
- May eliminate capital gains tax for gifts of long-term appreciated securities
- Accepts many types of assets
- Income may be for life or for a fixed term of no more than 20 years
- Requires setup and ongoing maintenance costs
A charitable remainder trust is one example of a structure that can benefit both you and a charity of your choice if it is appropriate with the rest of your planning strategy. A CRT is not an appropriate financial vehicle for everyone so be sure to discuss this and your entire financial picture with your estate planning professional.
Healthcare decisions need to be made. In addition to your financial planning you also need to work out a healthcare plan. Should you become injured and unable to speak for yourself you should have a person in place that can make those difficult decisions for you. Normally that person would be your spouse but if your spouse predeceases you or is unable to fill this role you should have a contingency plan in place. To properly address these issues you may need to face some difficult questions such as whether you would like to be put on life support and how you feel about organ donation. You should discuss your wishes in detail with the person or persons that you nominate to make these choices and include this information in your estate plan. Your estate planning professional can help you create a durable power of attorney for health care that will include all this information. This power of attorney will allow your designated agent to make healthcare decisions for you per your wishes.
Consider your pets. You can include your pets in your estate plan. If you have a beloved pet, consider what will happen to him or her when you’re gone. If your spouse predeceases you, where will your pet go when you pass? You can include plans for your pet and financial considerations to help pay for care in your estate plan. This may help ensure that your four legged family members are taken care of after you are gone.
Estate planning is important for anyone. Whether you are married, divorced or a childless couple it is important to create a plan. By thinking ahead and putting your wishes down in a formal, legal document you are able to make your wishes known for those left behind. Don’t leave your assets and health to chance or to the state. Have the hard conversations and then work with an experienced estate planning attorney to ensure your wishes are followed.