If estate planning is primarily about passing on your assets, how do you do so when you do not have children or other direct heirs? Do you even need to plan your estate when you have no children?
Estate planning is crucial for everyone, regardless of their circumstances. With children, without children, single, married, young, aging, and every other situation – estate planning is a must for anyone who wants a say in what happens to them, their loved ones, and their assets at the end of their life.
Why Estate Planning is Important Even If You Have No Children
If you don’t have children or other obvious heirs, the focus of your plan will be different than other families, but it is still critical. Here’s why.
If you have no children and you die without an estate plan, the state will distribute your assets and possessions to your next of kin. You can see Virginia’s order of next of kin relatives who would receive your estate here. This can be problematic for several reasons. Maybe you have certain relatives you do not want to receive anything from your estate, regardless of if they are your next of kin. Perhaps you have a friend who is like family to you, and you want them to receive your assets. Or, if you truly do not have any living kin, the state will receive your assets, and most people do not want to give their estate to the state government.
Also, without a comprehensive estate plan, which includes documents such as an advance medical directive and a financial power of attorney, you open yourself up to a higher likelihood of abuse, neglect, or negative outcomes as you age and begin losing your capacity.
So, even if you do not have children or direct heirs, it is still risky to neglect planning your estate.
With a properly set up estate plan, however, you are the one in charge of who receives your assets, whether that is a friend, a distant relative, or a non-profit or charity you value. It also gives you the opportunity to put legally binding instructions in place about your medical and financial wishes as you age. It is always much better for you to be the one in control of these matters than the state.
Along with legal implications, planning your estate ahead of time allows you to consider the last words of encouragement, convictions, and values you want to leave for your circle of influence when you pass.
If you are unsure about how to plan your estate because you don’t have children, here are some general guiding principles to consider
1. Create a plan that will protect you as you age. You may not have children to care for, but you do need to make sure you are cared for as you age. Tools such as an advance medical directive and a power of attorney are documents intended to be used while you are still alive but need others to care for you. Set these documents up now, with medical and financial instructions so that your agents will know how to act on your behalf should they need to.
2. Consider leaving an inheritance to other family members or friends. People naturally think of leaving their assets to descendants, but this isn’t necessary. You may want to use your assets to take care of a sibling, a niece or nephew, or a cousin. It also is not necessary to leave your assets to a blood relative. You can bequeath your estate to a friend or friends.
3. Consider leaving a legacy through planned giving. Last, consider planned giving. Planned giving is setting up your legal documents to leave your money or other assets to a charity, and it can have a very powerful impact. We have seen planned giving be a wonderful way to leave your legacy in the lives of your community and those who benefit from your charity of choice. Often when someone does not have children, it can feel like leaving their assets behind does not hold as much meaning as it could. But we encourage you to open your mind to the impact you can make in the lives of those around you.
If you are trying to plan your estate but don’t know how to do so because you do not have children, call us. We specialize in helping both couples and singles create plans to care for themselves as they age and the people and organization they love when they pass. We would love to chat with you!