Although I talk a lot about the importance of estate planning for parents with kids, preemptive and proactive planning is equally important for adults without children of their own. Estate planning does not involve only after-life planning; it also encompasses planning for the control, management and protection of your money and things, and decisions regarding your health care, while you are living.
If you do not have children, regardless of your marital status or financial situation, you face potential estate-planning complications that those with children do not. Without proper estate planning, you are not only jeopardizing your personal property, but putting your life at risk, too. Not to mention the potential conflict and expense you are leaving for your surviving family and friends to deal with.
So, if you do not have children, consider these three inconvenient truths before you decide to forego estate planning.
1. Someone will get your stuff
In the event of your death – whether you are rich, poor, or somewhere in between – everything you own will be passed on to someone. Without a will or trust, your assets will go through probate, where a judge and state law will decide who gets everything you own. In the event no family member steps forward, your assets will become property of the the State of Florida.
Did you know there is over $1,000,000,000, yes, that is A BILLION DOLLARS, of unclaimed assets being held by the Florida Department of Financial Services from people who pass away without naming a beneficiary or who have no legal heirs?
Why give the state everything you worked your life to build? Even if you have little financial wealth, you undoubtedly own a few sentimental items, including jewelry, clothing, or pets, that you would like to pass to a close friend or favorite charity.
It is rare for someone to die without any family members stepping forward. Instead, it is likely that some relative you have not spoken with in years will come out of the woodwork to stake a claim in your estate. Without a will or trust, Florida laws establish which family member has the priority inheritance. If you are unmarried with no children, this hierarchy typically puts parents first, then siblings, then more distant relatives like nieces, nephews, uncles, aunts, and cousins.
Depending on your family, this could have a potentially dangerous – even deadly – outcome. For instance, if your closest living relative is your estranged sibling with serious addiction issues, coming into any amount of money could not be in their best interest. What if your assets are passed on to a niece who is still a minor child and likely to squander the inheritance once she turns 18 years of age?
If your estate does contain significant wealth and assets, this could lead to a costly and contentious court battle, with all of your relatives hiring expensive lawyers to fight over your estate.
If you are married and you pass away without a will or a trust, everything goes to your spouse. However, when your spouse passes away after you, all those assets go to your spouse’s family, not yours, regardless of the fact that you may not like your in-laws. Do you want your spouse’s sister, brother, parents (or the new spouse he or she marries after you die) inheriting what you have worked so hard for?
2. Someone will have power over your health care
Estate planning is not just about passing on your assets when you die. In fact, some of the most critical parts of planning have nothing to do with your money at all, but are aimed at protecting you while you are still alive.
Advance planning allows you to name the person you want to make health care decisions for you if you are incapacitated and unable to make decisions yourself. For example, if you are temporarily unconscious following a car accident and unable to give doctors permission to perform a potentially risky medical treatment, it is not always clear who will be asked to make that decision for you.
If you have a romantic partner, but are not married and have not granted that person a legal medical power of attorney, the court will likely have a family member, not your partner, make that decision. Depending on your family, that person may make decisions contrary to what you or your partner would want.
If you do not want your estranged sibling to inherit your property, you probably do not want them to have the power to make life-and-death decisions about your medical care, either. However, that is exactly what could happen if you do not proactively plan ahead.
Even worse, your family members who have priority to make decisions for you could keep your dearest friends away from your bedside in the event of your hospitalization or incapacity. Likewise, family members who do not share your values about the types of food you eat, or the types of medical care you receive, could be the one’s making decisions about how you will be cared for during your incapacity.
Even if, or maybe especially if, you do not have kids, you need to do estate planning in order to name health care decisions-makers for yourself and provide instructions on how you want decisions made.
3. Someone will get power over your finances
As with health care decisions, if you become incapacitated and have not legally named someone to handle your finances while you are unable to do so, the court will pick someone for you. The way to avoid this is by naming someone you trust to hold power of attorney for you in the event of your incapacity.
A durable power of attorney document is an estate planning tool that gives the person you choose immediate authority to manage your financial matters if you are incapacitated. This agent will have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting your Social Security benefits, selling your home, as well as managing your banking and investment accounts.
Because the legal authority granted in a power of attorney are so broad, it is critical that you only give this power to someone you absolutely trust and, ideally, with the guidance of a lawyer who can watch out for your best interests.
The fact that a durable power of attorney is granted as soon as you are incapacitated means your agent can begin handling your finances immediately, without waiting for a judge’s decision, simply by presenting a legal document and appropriate proof of your incapacity to a financial account holder. Since courts are notoriously slow, this quick access can be immensely beneficial to ensure your bills get paid on time and you have the funds available when you need them.
Without a signed durable power of attorney, your family and friends will have to go to court to get access to your finances, which not only takes time, but it could lead to mismanagement and even the loss of your assets should the court grant this authority to the wrong person.
Furthermore, the person you name does not have to be a lawyer or financial professional—it can be anybody you choose, including both family and friends. The most important aspect of your choice is selecting someone who’s imminently trustworthy, since they will have nearly complete control over your estate. Besides, with me as your Personal Family Lawyer®, your agent will have access to me as your trusted counsel should they need guidance or help.
4. Someone will need to take care of your pet
It’s nothing new, but young adults favor pet ownership over children. Just as a loving parent wants their human children to always be safe and cared for, pet parents want the same for their furry family members. What pet parents may not know is that their pets are property under the law. Yes, they are property! Without a legal plan for your pet, such as a designated guardian and caretaker, a cherished animal could end up with an unintended caregiver, in a shelter or euthanized.
The best way to ensure the lifelong care of your pet is to create a pet trust. A pet trust allows you to leave behind money, assets and specific directions for the care and maintenance of your pet. With a pet trust, you will also list the people you trust the most to care for your pet in your absence.
It is important that your pet trust includes terms that specify what will happen to any remaining money and assets in the trust once your pet passes away – because you do not want any leftover funds to go to waste. A few options include splitting up the funds among human beneficiaries or donate it to charity.
Estate planning without kids
Given all of these potential risks, it is crucial for those without children not to ignore or put off basic estate planning strategies. Identifying the right planning tools is easy to do. When you work with my law office, you and I carefully go through everything you own and everyone you love, allowing you to make informed, educated, empowered choices for yourself and your loved ones.
Estate planning without kids should not be considered unnecessary and should not be overlooked. It will likely take just a few hours of your time to be certain that your assets, healthcare, and relationships will be managed in the most effective and affordable manner possible in the event of your death or incapacity.