Some of our clients have accumulated significant wealth, but do not have children as beneficiaries. This creates a unique estate planning scenario for them and their families. Here are recommendations we have based on our experience dealing with families without children.
- Consider long-term-care insurance. The average 65-year-old person will spend >$155,000 on healthcare throughout retirement, according to a Fidelity Investments survey from 2023. Consider long-term-care insurance early on, even in your 40s or 50s, when the cost of such care is more affordable. Clients worry that it is a needless expense, but if they end up needing serious care and there is no close relative to provide it, then a long-term-care-insurance policy will be useful. While policyholders in the past did sometimes forfeit their investments if they died without needing the care, new hybrid policies are more flexible, and some allow people to withdraw at least part of the money that they contributed as cash, and/or have a death benefit for heirs.
- Enlist trusted help. Often people without children turn to spouses or other family members to serve the roles authorized by a healthcare proxy or durable financial power of attorney—someone authorized to make financial decisions. Trustworthy friends and neighbors may also fill these roles. Consider someone local for the healthcare proxy since that person will help with emergencies. Many seniors use doctors, estate-planning attorneys and financial advisers, among others, to discuss difficult issues such as end-of-life care. Financial, legal, and health experts all urge people to create documents assigning medical and financial powers of attorney. Without such documents, a probate-court judge might have to determine a conservator or guardian for someone who becomes incapacitated.
- Be detailed in your estate planning. When planning their wills, people without children should check what beneficiaries they have chosen on financial accounts. When parents or siblings are designated to receive assets, as often happens in such cases, the documents may need updating. And, for the sake of your executor, be thorough. Being someone’s executor is a thankless, complicated job; one favor you can do for that person is to have it tied up nicely and clearly. This may include funeral planning and assignment of personal property items.
- Giving while living. Remember that your estate – and the assets in it – are yours. Use them for your benefit. Giving while living is an excellent way to share assets with loved ones while everyone can enjoy them. Many of our clients donate to charities, gift money annually into their nieces’ and nephews’ education accounts, or spend money on multi-generational family vacations. These are excellent ways to enjoy your family while also accomplishing estate planning objectives such as minimizing potential estate taxes and treating your beneficiaries fairly.
If you have questions about estate planning without children, or any other matters related to business or estate planning, contact Fournier Legal Services to learn more.