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DINKs Need Estate Planning Too

How to capture the married without children market.

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.

DINKs

One demographic that can’t be ignored is the voluntarily childless market, 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.

What does that mean for estate planning? In short, the needs of your clients aren’t the same as they used to be, and the benefits of estate planning vary more for each family.

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. According to YaleGlobal, women with a university education are more likely to be childless than those with a secondary education.

Estate planning attorneys need to change the way they talk about estate planning to reach this growing demographic. Designating guardians for minor children or setting up a trust for children won’t be a selling point for these couples. That doesn’t mean they can’t benefit from estate planning. In some cases, estate planning is even more important for DINKs. Let’s look at the ways DINKs can benefit from estate planning. 

Health Care Planning

Establishing financial powers of attorney and a health care advance directive allows clients 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 behalf of the patient. 

Preparing for incapacity and ensuring financial well-being is never a fun topic, but DINKs need these services too. Various types of trusts and planning techniques exist to help them meet their long-term objectives.

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 couples who elect not to have children, that means a significant amount of money will remain in their pockets.

How they plan to spend that money is another question altogether. Without children, DINKs are less concerned about preserving wealth for future generations, but may still want to distribute assets to friends, family members or charity. An estate plan helps your clients make these decisions in the most efficient way possible, designating who will receive what and when. Without an estate plan, those decisions can be left up to the court.

Many couples create a charitable remainder trust, which allows clients 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 clients 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. 

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 your clients protect their partners. For some couples, a simple will can save a lot of potential headache and anxiety for only a few hundred dollars. For more complex estates, trusts might provide more adequate protection, with the added benefit of avoiding the probate process and maintaining privacy outside of public records. 

Changing Perspective

Educating your clients or potential clients about the benefits of estate planning requires changing perspective. The benefits of estate planning aren’t always the same, so attorneys need to adapt and meet clients where they are. You can help your clients meet their goals and plan for the future regardless of their family situation.

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