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Estate planning is often thought of as something people do for their kids, but it’s just as important, if not more so, for individuals and couples without children. As someone without obvious heirs or next of kin, it’s essential to make clear decisions about who will manage your affairs, inherit your assets, and act on your behalf when you are unable to.
Estate planning isn’t just about passing things on. It’s about protecting your independence, ensuring your values are honored, and making life easier for the people you trust most.
Estate planning for child-free families centers around setting up advanced healthcare directives and creating a plan for their assets. Without an obvious next of kin, wills and trusts define who or where assets go to. Then advanced directives outline who makes healthcare and financial decisions in the event one or both people are incapacitated.
Estate planning also covers more than inheritance. Powers of attorney are particularly important for individuals without children. These advanced directives ensure your wishes are known and your interests are protected if you are incapacitated and need someone to act on your behalf for either medical or financial matters.
Complete our short questionnaire to discover what estate planning documents you’ll need based on your circumstances and priorities.
Both wills and trusts determine how your assets are distributed, but a trust has the added benefits of staying out of probate and providing more control and flexibility over how and when distributions are made. Staying out of probate is often desirable because probate can be lengthy, incur administrative costs, and be stressful for loved ones.
Assets can be given to friends, siblings, nieces, nephews, other extended family members, or anyone you choose. Many people also choose to set aside money to support the pets they leave behind.
Legacies are not always lineage! How you distribute your assets can be a reflection of your values. People often donate to their alma maters, churches, organizations, or charities supporting veterans, children, animal welfare, or disaster relief.
While a legacy donation, also called a planned gift, can be made via a will or a trust, a trust offers more flexibility and control. If you choose a trust, there are two main types to choose from:
Charitable Remainder Trusts: Assets provide income to you (or another beneficiary) for a period of time. After that time period, the remaining assets are distributed to the named charity or charities. These trusts are only used when leaving a large sum and require the management of a financial firm alongside the attorney’s work.
Charitable Lead Trusts: Distributions are made to one or more charities for a period of time, and then the remaining assets are distributed to you or another beneficiary.
The size of the organization might matter to you! Large organizations often have a good track record with big projects and managing large funds. Other people prefer smaller organizations that are more local where the gift may have a larger impact. If the organization is very small, though, they may not know how to manage large gifts, and you may want to consider donating to several organizations instead of giving everything to one small charity.
Even if you already know what charity you want to give to, it’s worth taking a look at their website or speaking with one of their staff members about options. They often have different funds if you want to donate to a specific program or project.
An executor of a will is responsible for the distribution of assets after the person creating the will (the testator) dies. A trustee is responsible for managing and distributing assets within a trust.
For both roles, it’s important to choose someone who is reliable and has the capacity to fulfill the necessary duties. Capacity includes both the time and general financial acumen to understand and carry out their role. They’ll need to locate assets, appraise and/or sell property, file taxes, and distribute the assets to beneficiaries.
Age and location of the individual should also be taken into consideration. While these individuals don’t necessarily have to live close to you, proximity certainly makes some aspects, like selling real estate or dealing with bank accounts in person, easier to manage. As for age, a trustee or executor may not be needed for decades after the document is created. It may be prudent to choose someone younger than yourself to decrease the risk of them dying before you or struggling to fulfill the duties due to age.
The role can be fulfilled by younger family members, close friends, or even professionals. Hiring a professional carries the added benefit of them being impartial and having expertise in the role.
Many parents rely on their children for help in their old age. Without an obvious next-of-kin to help you formally or informally as you age, it’s critical to have the necessary legal documents in place to make your wishes known and plan ahead. Powers of attorney are used for when an individual is incapacitated and cannot act on their own behalf.
The financial power of attorney allows a specific individual, an agent, to act on your behalf for financial matters when needed. The agent has the responsibility for acting in your best interest. They can pay bills, handle insurance and tax matters, sign checks and legal documents, manage investments and bank accounts, and perform other similar duties.
A financial power of attorney can help in short-term or long-term scenarios. One example could be in a medical emergency where you are incapacitated but later recover. Your power of attorney would be able to manage your finances while you are incapacitated and you would resume handling them when you are of sound mind. Or for a long-term situation where you develop dementia or simply slow down with age, the power of attorney would help manage your finances.
Despite the fact that a financial power of attorney may also be necessary in a medical situation, they do not make medical decisions.
A medical power of attorney, also called a healthcare power of attorney, can make medical decisions on your behalf in the event you are incapacitated. They can make decisions regarding treatments, medications, surgeries and more. Healthcare providers can talk with them about your medical care, including your prognosis and options. A medical power of attorney only goes into effect if two doctors have determined an individual to be incapacitated.
Advanced directives include living wills and do not resuscitate orders, which make your wishes on specific circumstances known in advance so there is less ambiguity for medical care providers, your family, and your power of attorney. A living will includes your wishes when it comes to palliative care, life support, pain management, and feeding tubes.
