For the majority of New Jersey residents, the primary focus of their estate planning involves how to pass on their assets to children and grandchildren. However, there are many couples who do not have children, and their estate planning needs are somewhat different. It is easy to assume that a childless couple has less need for a comprehensive estate plan, but this is simply not true. Even when there are no direct descendents in place, individuals still need to create a roadmap for how their assets will be handled in the event of their death.
Without a will or trust in place, the distribution of one’s assets will be dictated by state law. This is an outcome that no one desires, as those left behind will have no control over how assets are distributed. In general, the spouse who survives the death of his or her partner will inherit the family’s assets. If that individual also dies intestate, his or her surviving relatives will inherit what is left. This leaves the family of the first spouse completely cut out of any inheritance.
One way to avoid this fate is to create wills for each spouse. Those documents can list any specific assets that are to be passed down to friends or family, leaving the remainder to one’s spouse. It is important to remember that if an individual wants specific assets to be given to specific people, those wishes must be clearly spelled out. It is insufficient to simply discuss the matter with one’s spouse and leave the ultimate distribution of assets up to the surviving partner. Things change over the course of time, and there are many instances in which an “agreement” about who will receive what is ultimately not honored.
An example lies in cases in which the surviving spouse remarries, and then predeceases the new spouse. Unless specific estate planning provisions were made, the bulk of his or her assets would pass on to the surviving spouse. This could leave friends and family of the first New Jersey spouse completely disinherited. While it can be difficult to conceive of the many ways that the future could unfold, this is just one example of the importance of placing one’s wishes in writing.
Source: The Wall Street Journal, “Estate Planning for Childless Couples“, Carolyn T. Geer, Nov. 8, 2014