15 Jun 2016

Estate Planning for DINKS

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The face of America is changing. Once upon a time, the nuclear family was the most prevalent “model” in American society (does anyone remember the Donna Reed show?). These days, however, as the population becomes increasingly more educated and career focused and for other personal reasons, fewer couples are having kids. These couples are sometimes referred to as “DINKs”) (Dual Income, No Kids). Foregoing parenting doesn’t mean couples should forego estate planning. In fact, without the added expense of raising and educating children, DINKs may have more assets to pass on which raises several unique issues.

If you are DINK couple (sorry, it makes me laugh), you may have several estate planning objectives. (1) you want to make sure your surviving spouse is taken care of if you die; (2) you want to make sure there is a plan in the event either or both of you become incapacitated; (3) maybe you want to make sure your pets (more than once pets have been referred to as the “children”); (4) perhaps you are a supporter of a charity or two and want to make a donation; and (3) you want to express your end of life wishes.

So whether you’re a young couple starting out, or a retired couple tying up loose ends, there are some things you need to know about.

 Wills
If you die without a will, your state will have to figure out whom to give your money and property to. How does that sound? A simple will could only cost you a few hundred bucks. For a married couple with no children, it doesn’t need to be very complicated. Have them done once and you’ll be good for years. You will also want to name your personal representative (executor in some states). You want to choose who that will be and not leave the chore to some unlucky relative.

 Beneficiaries
Designating beneficiaries is something you can do if you have very simple financials. Be careful though because using beneficiaries will take precedence over any other estate planning. Make sure you have them and it is current.

 Living Trusts?
A living trust is when you put your assets – money, home, car – into a trust while you are still alive, and keep using them. When you pass away, the assets in a very efficient way transfers to whoever the beneficiary is. Trust are an excellent means to address incapacity privately without the need for guardianships or conservatorships. If you have a trust or have one created, make sure you actually put your assets in the trust – something often overlooked.

 Leaving Money to Charity
Do you want to leave behind a charitable legacy? You can do this in your will, trust or in a charitable trust. Most people create a charitable remainder trust that allows you to live off of the assets while you are alive. When you die, what’s left goes to the charity. A charitable lead trust works the opposite way.

 Power of Attorney
You must have one. Period. And, it better be a good one that a financial institution cannot challenge. It must also be current – no older than two years. There is lots of flexibility on how and when they come into play.

 Living Will and Health Care Proxy
You know you need these even if you are a DINK couple. A living will says what your wishes are if you are in a vegetative state and doctors need a directive on whether to prolong your life with medical care. A health care proxy is the person you’ve designated to tell the doctors what to do in these situations and others. Do not rely on doctor’s deferring to your spouse. Have it in writing.

 Review your Existing Documents.
If you already have documents in place, it makes sense to pull them out from time to time to make sure they are consistent with your current circumstances. Estate Planning is a process not a transaction.

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