There are many sound reasons why childfree financial planning is worth your time and attention. Even if you don't have kids, it gives those you leave behind a precise set of instructions that clearly set forth how you want your assets to be distributed after you die. It also helps to prevent parents, siblings, in-laws, distant relatives, organizations and even your spouse from fighting over your possessions.
With the help of an estate planning attorney, you can prevent many of the quarrels, misunderstandings and hurtful accusations that can erupt when money is the issue. Those wounds can take years to heal, if they ever heal at all.
Do You Need a Will If You Don't Have Kids?
Don't simply assume that a surviving spouse, if you have one, will automatically inherit everything. If you die intestate, that is, you die without a will or a trust, the laws in your state will determine how your assets are distributed to survivors. Heirs can include children from a previous marriage.
In most cases, a surviving spouse will inherit only the assets that are jointly held. Those assets can include joint bank accounts, jointly-owned automobiles or a house owned by both spouses.
Assets that are held separately, such as work-sponsored individual retirement plans and life insurance policies, will go to your spouse only if you listed them as the beneficiary.
Federal and state tax liability is another area where an estate planning attorney can help. Although the surviving spouse can usually inherit an unlimited amount of assets without paying federal tax, the laws in your state may be different. Your attorney can tell you what your tax liability is likely to be.
Although making a will when you have no family might seem pointless, it informs your survivors precisely where you want your holdings to go. If you die intestate, the entirety of your valuables will go to the government for probate prior to asset distribution. That puts the government in charge of all your assets and allows the government to decide where each asset will ultimately go.
Because most people would prefer to make those decisions themselves, making a will when you have no family is just as important as making a will when you do. The laws differ from state to state, but if you don't have children, your assets will typically be divided between your parents and siblings.
How to Make an Estate Plan Without Children
It's easy to put off making a will when you have no family. After all, no one is depending on you to provide for their financial needs after you die. But what about inheritance fraud? What if someone shows up who is claiming to be the long lost child you gave up for adoption at birth?
A clever and shrewd criminal can run a convincing scam complete with forged documents and letters attesting to their stellar character. If there is no executor of will, or no will at all, and no one questions the authenticity of the claims, the government could award all of your holdings to the imposter.
Childfree financial planning can prevent these costly schemes. It gives you the power to protect your holdings when you can't be there in person.
There is also the question of health care. If you become disabled and unable to care for yourself, sound estate planning with no heirs can ensure that the care you receive is the care that you want.
An estate planning attorney can help with all of this. They can advise you about things like setting up a trust fund for a pet or providing funds for your housekeeper until they secure other employment.
With childfree financial planning, you can create a legally-enforceable will that doesn't involve the government.
Tips on Estate Planning for Childless Couples
An estate planning lawyer can help you put your final wishes into a legally correct format. Estate planning can be complicated, but an experienced attorney will make the process as simple and straightforward as possible.
A good starting point is to discuss the matter with your spouse. Have you named your spouse as the beneficiary of your life insurance policies and your IRA? All assets should be considered, and an executor of will should be named.
The executor of will is responsible for paying off your debts and distributing your assets after you die. Obviously, you should choose someone you trust who is beyond reproach. The executor could be a spouse, a family member, a friend, a parent or anyone else you trust who is willing and able to assume the responsibility.
Consider retaining a professional executor. A professional will ensure that the job is done by the book. They have the experience and expertise to manage wills from simple to highly complex. Retaining the services of an expert may be the best course of action whether you have children or not.
You will also need to give someone power of attorney, A power of attorney has the authority to act on your behalf in legal, medical and financial matters. Married couples usually give their spouses power of attorney. Nevertheless, it's wise to name an alternate power of attorney in case your spouse also becomes incapacitated.
Remember that even if you have no family, there are countless people who would greatly benefit from even a small inheritance. If there is no one you can think of, contact food banks, churches, homeless shelters and other charitable organizations that provide services for low-income people. You could also fund a scholarship program for needy students. Not only will you reduce your estate taxes, but you can also make a positive difference in someone's life.
