Don't depend on spousal survivorship when estate planning
Having children might prompt parents to approach estate planning sooner than childless couples. However, having a will or trust is important for every individual, for several reasons.
First, without a will or trust, state laws of intestate succession will apply. Most individuals, even those without children, prefer to have a say in who inherits their assets. For example, married couples might know that assets will generally pass to a surviving spouse. Upon the death of the surviving spouse, assets will pass to his or her heirs, rather than the heirs of the first spouse. Thus, if the first spouse did not have a will or trust, his or her heirs could be disinherited.
For individuals interested in charitable giving, estate planning is also a must. Under the laws of intestacy, there is a prescribed hierarchy regarding which relatives may be entitled to an inheritance. In the rare instance where no living relatives are available, an estate might pass to the state. Charities usually don’t figure into intestacy law.
A couple may prefer to formalize a backup plan via a revocable trust, while still retaining control of assets. Of course, in the event one spouse dies sooner than the other, the surviving spouse will have complete control over the revocable trust. Thus, there’s still no guarantee that the first spouse’s heirs, loved ones or designated charities will inherit assets from that revocable trust. For that reason, an irrevocable trust may be the preferred charitable giving vehicle for an individual.
Finally, estate planning is recommended for any individual that wants to have some say over how financial and/or medical decisions will be made in the event of personal incapacity. An attorney that focuses on estate planning can provide the details of which powers-of-attorney or healthcare documents might accomplish those goals.
Source: The Wall Street Journal, “Estate Planning for Childless Couples,” Rob Shepperson, Carolyn T. Geer, Nov. 8, 2014