Married but childless: Do you need an estate plan?
If you’ve been following my blog you probably know that many of the estate planning posts assume that a person’s heirs are his or her children. So what about childless couples, you may have been asking yourself, do they need a plan too? The answer is yes. At the very least, they should answer two questions: Who will inherit their property, and who should handle their affairs if they become incapacitated?
I have talked about the need for advance directives and about durable power of attorney for health care before, in a post titled The Responsible Choice, and my entry The Low Down on Probate gave an overview of why avoiding the lengthy process of probate is important for everyone. But here’s a little more background information on what happens with your property if you die childless and intestate (without a will) and your spouse survives you. In this case, California state law dictates that your married partner must receive your portion of what you owned together plus half of what you owned as an individual. The other half of your individual assets goes to your parents or, if they have already passed away, to your siblings.
The question is, of course, what will happen after your spouse dies? This is where it gets tricky, at least for some people: His or her next of kin will inherit everything, and if there aren’t any relatives on that side of the marriage the state takes it all. What about your family then? Shouldn’t the sister you have always loved so much, the one that looked out for you when you were kids, inherit before the government does? What about the little nephew who adores you? Couldn’t your assets help pay for his college education?
The tools that’ll help you keep at least some form of control over your property even beyond your death are wills and trusts. You and your spouse can create a living trust where you set the rules for who should inherit what and when, and where you name the people who should handle your financial and health affairs if you become incapacitated. These trusts are revocable, meaning the surviving partner can change the beneficiaries later on. If you want to guarantee that the people you name will inherit your assets you must use an irrevocable trust.
by Kevin J. Moore