Northwestern Mutual: 4 Reasons People Without Children Should Still Have an Estate Plan
NEW YORK, February 21, 2022 (Newswire.com) - People without children may think there's no need to have an estate plan and/or will. This misconception can be especially true for married couples who believe the estate will easily transfer to a surviving spouse.
However, the truth is an estate plan can make life a lot simpler in the time leading up to and after someone passes away. Whether someone is married or not, here are four reasons why people without children still need an estate plan.
1. An Estate Plan Can Designate Healthcare and Legal Authority
An estate plan assigns decision-making authority for healthcare and legal decisions through critical documents like an advanced healthcare directive and power of attorney. And those without children still need to define these decision-makers, whether it's a spouse, friend, sibling, niece, or nephew.
If someone falls ill, gets into an accident, or is otherwise incapacitated, their spouse or designated decision-maker needs the authority to make decisions on their behalf. And failure to get the proper documents in place could mean receiving care that doesn't align with someone's wishes.
2. An Estate Plan Ensures Financial Accounts Will Make an Impact
Many people work their whole lives to accumulate assets and financial accounts. And often, they want that money to have meaning. But assets left without explicit direction in a will could put financial accounts in the hands of probate court. Depending on state regulations, those without a spouse could risk money falling to extended family members or someone they wouldn't want to receive the benefit of a lifetime of hard work.
By designating where financial accounts should go and using a will, loved ones or charities could benefit instead. That means assets like, taxable brokerage accounts, savings/checking accounts, CDs, etc. can directly benefit people or causes meaningful to the deceased.
Other accounts, such as retirement accounts, annuities and term life insurance policy death benefits are directed by their beneficiary designation, not a will. However, they can also be a key part of an estate plan as they avoid probate and can also avoid attorney's fees. Updating beneficiaries should be done at the same time as keeping a will up to date.
3. An Estate Plan Outlines Who Will Care for Pets
An important consideration after someone passes away is what will happen to their furry loved ones. And for those without someone else at home to take over the responsibility, an estate plan is a perfect place to outline where pets will go and what, if any, financial support they'll receive. Failure to appoint where pets should go could mean they'll be much worse off after their human is gone.
4. An Estate Plan Can Help Smooth Business Succession
Business owners have a unique obligation to their partners and employees to ensure the business can continue after they're gone. While business owners should already have a succession plan established, a well-developed estate plan can help smooth the transition.
Regardless of whether or not someone has children, they've still accumulated a lifetime's worth of assets. An estate plan can ensure assets are distributed according to the deceased's wishes and that care in the final months of life goes according to plan.
Source: Northwestern Mutual