Estate Planning Without Children

Estate Planning Hacks When There Are No Children

Tragedies related to Estate Planning without children are an ancient literary archetype.  From Cain and Able to Charles Dickens, the abuse and discord that can result from property passing when there are no children is a persistent theme.  There is a reason for this.  It has frequently encountered part of the human experience.

In his dream, Ebenezer Scrooge sees his future death.  He bemoans that servants, neighbors, and strangers sing and dance around his grave dividing up his personal belongings.  This happened not because he had no children.  Nor did it happen because he was miserly.  The same thing happens to the most generous and kind people.

It happened because he had no plan.

When one has no children, the planning is not pre-determined by social expectations.  The options are wide open.  Sometimes having a multitude of choices can make decisions more difficult.  It helps to spell out precisely what the options are so that we can see clearly what we may select from.

Potential Beneficiaries

Who is going to get your stuff?  There are only so many options.  You can divide it up among this group any way you wish.

1. 1. Extended Family Members you know and care about
   2. Family Members you don’t know and don’t care about
   3. Friends
   4. A specific Charity
   5. A Family Foundation to support:
      1. Whatever charities you pick from time to time
      2. Scholarship or educational funds
      3. A charitable mission that you define
   6. The IRS
   7. The State Where You Live
   8. Your Health Care Providers
   9. Neighbors & Passing Strangers

Potential Fiduciaries (People with Authority to Administer Your Estate)

Who administers your estate is a big issue.  Whoever it is, the best options have independent professional or regulatory rules that hold them accountable to carry out your wishes and instructions.  The worst options are friends or relatives who are not getting your stuff, but wish they were.

1. 1. Extended Family & Friends
   2. A CPA
   3. An Attorney
   4. Private Fiduciary
   5. Bank Trust Department
   6. Trust Company
   7. The Charitable Beneficiary

Estate Planning Pitfalls When There Are No Children

1. Doing Nothing – while this is tempting, it creates many problems, and results in waste and conflict
2. Mis-using Joint Tenancy.  Property with Joint Tenancy status can end up going places you don’t want.  If you use Joint Tenancy, think through the succession issues and make sure it will flow the way you wish.
3. Mis using Tenancy in Common – owning an undivided interest in property without putting a plan in place for who gets it when you pass causes great delays and expense for the other owners.  Even if you have children, if you own a property with someone who has no children, it is in your best interest to encourage them to put a plan in place.
4. Pay On Death (P.O.D.) Beneficiary designations.  Financial institutions have no obligation or incentive to find and notify beneficiaries of accounts they might receive.  We have seen millions of dollars go unclaimed for years because the designated beneficiaries had no idea they existed.  P.O.D. or T.O.D. accounts are simply a bad idea for non-child beneficiaries.
5. Failing to Deal with Digital Assets
6. Naming Inappropriate Fiduciaries – do not name neighbors or family members who are getting nothing from your estate as Trustee or Executor (Personal Representative)
7. Leaving Things to People You Don’t Know or Care About
8. Bad timing of charitable gifts.  The tax deduction for charitable gifts can happen while you are alive or after you are deceased.  While you are alive is generally better.

Get Help

We can help you navigate through these issues to chart a course that you will be comfortable with and which will carry out your wishes.  The initial consultation is complimentary.  Call or email.