Discussions on estate planning often focus on couples with children, but making decisions only for two is just as crucial. With or without heirs, you must have a comprehensive plan in place to ensure anything left behind is communicated through a detailed plan that outlines specific wishes. In addition, an estate plan must be made accessible to guarantee that those wishes are fulfilled should something happen to you.
We’ve outlined three considerations that childless couples should keep in mind when it comes to estate planning:
- Plan for longevity. The biggest concern that childless couples face is outliving their money. Since couples without children do not necessarily need to leave money behind, longevity is the biggest financial risk as a couple. Children can help step in to help pay for their parent’s care or even take care of them if they are ill. However, without children, you must consider the costs associated with nursing homes, long-term care, etc.
- Who receives your assets? When choosing who to leave your assets to after you pass, the most popular options include family and/or charity. Moving one generation down and leaving assets to nieces and nephews, or someone you have a connection to is the most common choice. Additionally, leaving assets to a charity or organization that has special significance to you is another option. You’ll want to make sure that assets go where you direct them to – rather than letting the state decide where it goes.
- Donor-advised funds maximize deductions and disperse funds. Donor-advised funds are philanthropic vehicles for individuals who would like to receive a tax benefit now for their charitable contributions. By setting up a donor-advised fund as part of an estate plan, you are able to choose the percentage amount going to a charity, allowing you to make the choice of where your money goes and ensuring aligns with your wishes. Putting money toward a donor-advised fund is a good way to receive tax benefits during your lifetime.