Whether you are single, married, have kids or no kids, you still need a will to distribute your assets upon your death, unless you want the state to make all decisions for you.
A recent Gallup survey reported in Yahoo Finance, “Estate Planning Is Important for People Without Children,” paints a picture of people who do not understand or don’t want to deal what will happen after they die. Singles without children who do not have a will, unmarried couples and married couples without kids still need to have an estate plan and a will. The cost and hassle that is created for spouses and for relatives, even distant relatives, is something that they may not be aware of.
There can be unintended beneficiaries, and this is especially true for singles. Complications and unintended consequences make it critical for singles and married couples without kids to plan for the distribution of their assets, as well as how to take care of themselves if they become incapacitated.
Everyone’s estate plan should have, at the bare minimum, a will and powers of attorney (POA) for financial and health care decisions. Powers of attorney are used in the event that an individual is unable to make decisions for him or herself. Married couples typically default to the spouse. However, if a couple is in a long-term relationship without a legal relationship (not married), then the powers of attorney are crucial. If you fail to name a person in a POA, the default may be a parent or sibling to whom you’re not physically or emotionally close. As a result, that person will be able to make decisions that may be contrary to what your partner would carry out according to your wishes.
Think hard about who you’d want to be a power of attorney. That person should have strong character and the ability to make tough decisions. After your POAs are created, think about the beneficiaries of your assets. When you do this, speak with your family members about these decisions.
For those couples without children, they may have favorite charities and may want to leave a gift to these organizations. As far as taxes are concerned, making charitable distributions while you’re alive is more efficient. The donor gets both an income tax deduction and a gift tax deduction, based on the amount of the gift.
One popular option is to create a donor-advised fund, which lets you take a current-year tax deduction on the fair market value of any gifts to the fund. The money doesn’t need to be immediately donated, allowing you time to make a decision on which charity to select.
Would you leave outright gifts to charity after your death? You can earmark money in IRAs, instead of other assets. A charity does not pay taxes on the retirement funds, but a non-charity beneficiary must.
Singles or couples without children may consider creating a charitable foundation, which will require the help of an estate planning attorney to set it up properly. This is a wonderful way to build a legacy that can impact and improve the lives of others.
No matter your situation, Legacy Counsellors, P.C. can assist you in creating a unique estate plan. Please contact our office today!
Reference: Yahoo Finance (February 16, 2017) “Estate Planning Is Important for People Without Children”