This is a collaborative post: Many couples without kids perceive estate planning as unnecessary, but the reality is that estate planning is as much of an important and even a difficult conversation for folks without children as much as it is for those with children. Moreover, if you die without proper estate planning, your and your spouse’s assets, your chance to help your family members, friends, neighbours, charities, or pets will be rested on your state who would have no clue how you would have wanted to distribute your assets.
Why do you need an estate plan without having kids?
People without kids still have a financial legacy and assets that can be distributed to their surviving spouse, family members and friends, neighbors, alma matter, favorite charity and pets, and a comprehensive estate plan ensures your legacy is just as you have determined and hoped for even without a natural heir.
How to compile your estate plan without having kids?
Compiling an estate plan without having kids can still be potentially challenging. Here are our 5 tips for estate planning without kids:
- Get a Power of Attorney (POA)
Every adult should plan for instances where either they or their spouse becomes incapacitated. Therefore, to ensure your medical wishes, you would need a healthcare directive, and for your other financial and legal decisions, a Power of Attorney (POA) is necessary. Without these crucial documents, not even your spouse can legally make decisions for you and to top it off, the court decides through guardianship or conservatorship proceedings who gets to make these decisions for you.
- Consider a Trust
If you are not ready to comprehensively make a will in your name, consider a trust. This legal document not only helps you manage your assets whilst you are living but can also help avoid probate at your death, acting as a substitute will. In the probate process, the court clears assets in your sole name, and our closest relatives can become “correct beneficiaries” by challenging it – a trust helps exactly with that.
- Leave money to a charity
You may decide to leave your legacy to a favorite charity that has impacted your life. Trusts (see no. 2 above) like charitable remainder trusts or charitable lead trusts can help with that. In the former, your remainder assets go to the charity of your choice, and in the latter, the income generated off of those assets benefits your favorite charity.
- Plan for your furry friends
Many couples will have furry children, and so it’s crucial to ensure their lifetime care even after your death. Unfortunately, many pets are euthanized because of the lack of planning upon their owner’s death. You can avoid this by either designating a willing person, a trust, or even an animal organization to take care of your furry children from your earmarked funds.
- Plan early
One final but perhaps the most crucial is to start planning early to protect your loved ones and help further the cause of your favourite organizations due to the unfortunate reality of unforeseen circumstances.