Single and childless? You might think you don’t need estate planning. But you might be wrong. Here are some things to consider.
Even if you are single, childless, and don’t have any immediate family members to inherit your estate after you die, there’s still plenty you can do in terms of estate planning.
“Regardless if there are no heirs, everyone should still have an estate plan,” said Erin Voisin, director of financial planning at EP Wealth Advisors. “Do you want the state to figure that out for you?”
When considering estate planning with no heirs, creating a will is one of the basic steps you can take. If you die without one (referred to as “intestate”), the state where you live will divvy up your assets as it sees fit, and the outcome may not be what you intended. If no heirs are found, your property may be escheated, which means the state gets to keep it.
David Shulman, an attorney with Florida estate planning law firm Ginsberg Shulman, wrote in a blog post: “As my old property professor used to say, ‘They call it escheat because you got es-cheated!’”
So what’s involved with creating a will? The main thing is deciding who you want to receive your assets. You can leave your stuff to anyone you want, such as your spouse, an extended family member, close friend, or charitable organization. And if you have a fur baby, be sure to include arrangements for their care.
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You’ll also need to choose an executor for your will who will oversee the distribution of your property. Once again, you can pick whomever you want, but it should be someone you trust and who is willing to serve in this capacity. It’s generally a good idea to talk to the person beforehand to make sure they want to take on this responsibility.
In addition to writing your will, you may also want to think about:
Wills and trusts both allow you to designate someone (a “trustee" in the case of a trust) to hold assets for your beneficiaries or charities and release the assets according to your wishes.
But unlike a will, a trust will typically skip over the probate process, which could allow your beneficiaries and/or charities to receive assets more quickly.
There are many different kinds of trusts, so choosing the right one is important.
Let’s say you don’t wish to designate any family or friends to inherit your property, so your estate plan has no heirs. In that case you may want to consider a charitable remainder trust.
You fund the trust with assets, and then the trust pays you over time. When you die, what’s left goes to charity. With these vehicles, you can set yourself up for retirement income and at the same time create a future donation to a cause you really believe in.
People who don’t set up charitable remainder trusts can list charities in their distribution plans or as beneficiaries of accounts, in the same way they would for friends, Voisin said.
While all this may not sound like the most fun thing to do on a weekend, consider what’s at stake and the power a little forethought can mean for your assets. As Voisin puts it, estate planning, with or without heirs, is “control from the grave.”
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