For childless couples to plan their estate, there are two main tasks: disposition of property, and assignation of power-of-attorney. Generally if there are no wills or trusts, the estate is inherited by the living spouse, and then by the spouse’s relatives after his or her death, which leaves no interest for the family of the first spouse. Approaches to go around this outcome include:
- outlining the persons and assets to be inherited after both deaths;
- transferring assets to a joint revocable living trust, which also helps avoid potentially costly probate;
- establishing irrevocable trusts in wills or separate trusts, which can limit beneficiaries upon the second death.
The appointment of power-of-attorney makes sure that someone will make medical and financial decisions on the person’s behalf if he or she becomes incapacitated. Spouses can appoint each other. Another option is to appoint some younger persons to carry out power-of-attorney to avoid awkward situation. Professional fiduciaries are also available in some states.
See Carolyn T. Geer, “Estate Planning for Childless Couples,” WSJ.com (November 8, 2014).
Posted by Jiaqi Wang, Associate Editor, Wealth Strategies Journal.