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.
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 childless couples.
- A will. You need a will because couples without children don’t have natural descendant heirs to inherit their wealth. If you die without a will, your assets will go to your spouse. If neither of you has a will, the state intestacy laws determine which of your family members inherit from you. The family of the first spouse to die may be disinherited.
- 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.
- 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.
- Remember the pets. If you have pets, plan for their care when you’re not around to tend to them yourself. One option is to name a person to take care of your animal in your will. 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 for that purpose.
Remember that child-free couples need an estate plan just as much as couples with children.
Reference: Motley Fool (September 9, 2019) “5 Estate-Planning Tips for Child-Free Couples”