The nuclear family has traditionally been defined as two parents, two-and-a-half children and a house with a white picket fence. It’s been the basis for the American image of “family” since the 1950s. But as they say, the times are a changin’. The American family now comes in every shape, size and color.
One demographic that can’t be ignored is the “voluntarily childless” populous, also known as Dual Income, No Kids (DINKs). While this social trend was identified in the 1980s, it’s become increasingly common and accepted in the years since the Great Recession.
The motivation for this child-free way of life varies. Some couples prioritize careers, travel or hobbies in lieu of raising children. Others see childrearing as a financial obligation they don’t want to be responsible for maintaining. Regardless of the reason, couples who choose to be childless are commonly highly educated with high incomes.
What does that mean for estate planning? In short, a comprehensive estate plan should be a primary objective, no matter which social demographic you belong to.
In some cases, estate planning is even more important for DINKs, especially those with large asset holdings. Strategic tax planning in essential and it is done with a comprehensive estate plan. Let’s look at the ways DINKs can benefit from estate planning.
Financial Power of Attorney and Health Care Planning
Establishing financial powers of attorney and a health care advance directive allows you to authorize an agent to manage medical and day-to-day financial affairs in the event of incapacity. These responsibilities include important medical decisions, financial transactions and providing for family members.
Financial powers of attorney specify distinctions for scope and timing of control for financial transactions, claims and gifts. Health care advance directives include health care power of attorney, living wills and HIPPA authorization. These components authorize an agent to manage non-end-of-life health care decisions, specify end-of-life wishes and establish who can receive medical information on your behalf, when you are unable to make those decisions yourself.
Preparing for incapacity and ensuring financial well-being is never a fun topic, but if you qualify as being in the DINKs demographic, you need these services too.
Meeting Personal and Charitable Goals
It will cost more than $233,000 to raise a child born in 2015, and that’s without college tuition. For those who have elected not to have children, that means a significant amount of money will remain in your pockets.
How you plan to spend that money is another question altogether. Without children, “DINKs” are typically less concerned about preserving wealth for future generations, but may still want to distribute assets to friends, family members or charity. A comprehensive estate plan along with collaberation with your existing financial advisors can help you to make these decisions in the most efficient way possible, designating who will receive what and when. Without an estate plan, those decisions may likely be left up to the court, and your assets diminish significantly through probate proceedings.
Many couples create a charitable remainder trust, which allows you to live off of the assets until death, at which time the remainder is distributed to charity. In the case of significant or complex charitable gifts, some might benefit from a separate charitable trust. These irrevocable trusts are an effective way to save on income and estate taxes and plan for charitable giving. Creating a Foundation is another way to distribute your assets and at the same time benefit those you designate to receive gifts from the Foundation.
Protecting Spouse or Partner
As the number of voluntarily childless couples rises, so too do the number of couples who choose to cohabitate, but not marry. Unmarried-partner households have increased 133 percent since 1993. In many states, this arrangement can create legal and financial issues for couples. If one individual dies or becomes incapacitated without a will or trust, it could leave the surviving partner without legal and financial protection.
Wills, trusts and powers of attorney can all help protect both partners. No matter how simple your estate is, or how complex, trusts provide more adequate protection with the added benefit of avoiding the probate process, and maintaining privacy, outside of public records.
The benefits of estate planning aren’t new, and your perspective might be one of apprehension, or perhaps you are just unfamiliar with the benefits, especially if you don’t fall under the typical family demographic from the 1950s. However, we have the expertise, experience, and mastery of the law necessary to design a comprehensive plan that addresses your most pressing concerns, specific needs and cherished desires for your future, regardless of your family demographic.