No Kids, No Will: Bad CombinationSubmitted by Bernhardt Wealth Management on August 5th, 2019
“Married, with children” isn’t an automatic combination anymore. In fact, even well-to-do persons in long-term, stable marriages—including celebrities like Christopher Walken, Jay Leno, Dolly Parton, and everyone’s favorite Golden Girl, Betty White—have stated publicly that they have never felt the compulsion to bring children into the world. Let’s face it: raising children is a monumental responsibility, and not everyone is cut out for it. Those who choose to remain childless should be respected for their decision.
But what about estate planning for childless couples or individuals? Is there any point, since there are no direct heirs? Well, as it turns out, there are plenty of reasons to have an estate plan in place, even if you have no children to inherit your assets when you pass on. The simplest reason is that if you die without a will or trust in place (in other words, if you die intestate), the courts will make the final decision about who receives the benefits of your estate. Wouldn’t you rather direct those benefits to a person, organization, or cause that you care about? With an estate plan in place, you can do that.
Of course, everyone should have in place an advanced medical directive and a durable power of attorney in the event of mental incapacity. Putting these documents into effect before you get sick or are involved in an accident will ensure that you decide who will manage your legal, medical, and financial affairs while you are mentally incapable of doing it for yourself. It surprises some people to learn that even a spouse is legally barred from making certain decisions in such a situation. The only way to avoid the time-consuming court process known as conservatorship is to have these plans in place before something happens.
For many persons, it makes sense to establish a trust rather than drafting a will. The trust can hold your assets, and you can be the trustee during your life. You will need to appoint a successor trustee to direct the trust after your death, making sure that your assets are disposed of according to the terms of the trust. Use of a trust can also avoid the delay and expense of the court process known as probate, which is the legal method by which the estate of a deceased person is parceled out. Probate is a much more public and protracted means of handling an estate than when it is placed in a trust, and many individuals prefer using trusts for this reason alone. The most important thing about a trust is appointing a responsible, even-handed entity as successor trustee. If no individual in your acquaintance fills the bill, you may want to consider a professional (attorney, CPA, etc.) or even an institutional (bank, trust company) trustee.
The will is the most common estate planning document, and, while it must go through the probate process, it also allows you to control the disposition of your assets after your death. As with a trust, your will must typically appoint an executor: a person or entity who, like a trustee, sees to it that the terms of your will are carried out as you direct.
As with many areas of life, the disposition of your estate following your passing is one where planning now will usually save time and money later. And even those who choose not to have children should still exercise the final say in who benefits from the assets they accumulated during life.