Whether you\u2019re a young couple just getting started or seniors looking to get your affairs in order, estate planning for childless couples includes five simple steps:<\/p>\n
If an accident or illness leaves you incapacitated, you will need someone to manage your assets, pay your bills, and make important decisions on your behalf. Your spouse will probably be the default for this role, and they wouldn\u2019t need any special authorization to do it. But what happens if you and your spouse are both incapacitated by a car accident? However unlikely, it\u2019s important to plan for contingencies like this by appointing a legal agent<\/a> with a durable power of attorney<\/a>.<\/p>\n You can authorize the agent to have full control over your assets, or you can specify exactly what they can and cannot have access to. Choose someone who is financially savvy, responsible, and can be trusted to make important decisions with your best interests in mind. You and your spouse can designate the same agent, but considering most people prefer to appoint a close family-member such as a parent or sibling, it\u2019s not uncommon for spouses to have different designated agents.<\/p>\n Don\u2019t confuse this with your last will and testament. Where a last will and testament governs your estate when you die, a living will (also known as an advance healthcare directive<\/a>) dictates your healthcare preferences during your lifetime. If you are incapacitated and cannot communicate important medical decisions, and if your spouse is not available to speak for you, then your doctors will follow the instructions in your living will.<\/p>\n In the document, you can broadly authorize any and all treatments to save and sustain your life, or you can specify specific forms of treatment that you do or do not approve of. Common topics people address in their living will include palliative care (treatments to alleviate pain and suffering), resuscitation (if you wish to be revived or allowed a natural death), and artificial life support.<\/p>\n In addition to a living will, you can also designate a healthcare proxy to speak on your behalf. Often you can do this with the same power of attorney you use to authorize a legal agent, but you can issue a separate power of attorney if you want someone else to make your medical decisions. Your healthcare proxy will be bound to the directions in your living will, so make sure the person you select understands your preferences and is willing to honor them.<\/p>\n Many people put their funeral and burial instructions in their will. While this is acceptable, it can be problematic if your family doesn\u2019t open your will until after your funeral. Write your preferences in a formal letter of instruction, and leave the letter with someone who will present it to your family when you die. If you\u2019ve purchased any pre-needs services from a cemetery or crematorium, or if you have money set aside to cover the cost of services, be sure to include this information so your surviving loved ones don\u2019t pay for it themselves.<\/p>\n For most couples, the succession plan is the same\u2014when the first spouse dies, all of their assets will pass to the surviving spouse, and when the surviving spouse passes away, the combined estate will pass to their beneficiaries. If this is the case for you, then it makes sense to draft mirroring wills<\/a>, where each spouse leaves their estate to the other. It\u2019s a good practice to designate contingent beneficiaries in case you and your spouse die together, but keep in mind that once your surviving spouse receives your assets, your estate will be closed and the assets are entirely their property. As such, they will be free to amend their will and alter the beneficiaries.<\/p>\n Note that your will can only control assets that are subject to probate, such as individual bank and brokerage accounts, and property that\u2019s held individually or as tenants in common. Assets that have a contractual beneficiary (sometimes referred to as non-probate assets) are engineered to bypass probate. Even if you name these assets in your will, your directions will be disregarded, as the contracted beneficiary always trumps your will. Examples of non-probate assets include:<\/p>\n Where a will offers direction for your assets, a living trust<\/a> actually takes possession of your assets and transfers them to your beneficiaries. Drafting a trust agreement can initially cost more than a will, but in the long run it can save you a significant amount of time and money by allowing the assets in the trust to transfer to your beneficiaries without going through probate. You can also designate contingent beneficiaries that cannot be altered after your death, and you can place stipulations on how assets will be distributed (e.g. creating a legacy account to fund higher education costs for your nieces and nephews).<\/p>\n While a will and a trust work best together, it\u2019s not uncommon to see childless couples opt for a living trust instead of a will, thereby allowing all of their assets to bypass probate, and summing everything up in a single document. This is certainly possible, but even if your living trust is the primary estate planning tool, it\u2019s still advisable to have a pour-over will to catch any assets that you forget to transfer to the trust.<\/p>\n Arizona is a \u201ccommunity property<\/a>\u201d state, meaning any assets that a couple acquires during their marriage are shared equally. Real or personal property acquired before the wedding is considered separate property<\/a>, unless those assets are comingled with other joint assets, in which case the separate assets become community property. That means that at any given time, each spouse is entitled to all of their separate property plus 50% of the community property. This is the basis for determining the value of your estate when you die.<\/p>\n If you die without a will, under the state of Arizona\u2019s intestate succession laws your entire estate will pass to your surviving spouse<\/a>. If you are a widow or widower, your estate will be distributed to your next-of-kin<\/a> in the following order:<\/p>\n For long-term peace of mind, contact us to set up a consultation today. We look forward to helping with your will and other estate planning needs<\/a>.<\/p>\nDraft a Living Will<\/h2>\n
Write a Letter of Instruction for Your Funeral and Burial Plans<\/h2>\n
Draft Mirroring Wills<\/h2>\n
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Establish a Living Trust<\/h2>\n
What Happens if a Childless Couple Dies Without an Estate Plan?<\/h2>\n
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