Estate Planning Without Children
The need for estate planning without children is not always immediately evident. Most people think about estate planning from the perspective of what happens when you die. While this is certainly an issue that needs to be addressed in your estate plan, it is not necessarily the most important issue for you. If you don’t have children, or even if you do, your primary concern may be ensuring that you and/or your spouse are taken care for the rest of your life, not those that may inherit your assets later. Without an estate plan, there is a very good chance that the wrong people will be responsible for managing your assets, health care and lifestyle while you are still alive.
Managing Your Finances
The first issue with estate planning without children is who will step in to take care of your financial affairs when you no longer can? Will it be the individuals or corporation that you want? Will they manage the assets the way you want? Most importantly, will they take care of you in the manner that you are accustom? Without an estate plan in place, a couple of things may occur: 1) You will be taken advantage of by someone who does not have your best interest in mind; and/or 2) You will be placed under a conservatorship by the Orange County Probate Court or the court in your jurisdiction. Either scenario alone should be reason to have an estate plan prepared.
Undue Influence
Being taken advantage of is not always in the form of some foreign email scheme. More often, it is pressure from family members or others in close proximity that are able to influence you to do things that you would not normally do. Whether you have been a homemaker your whole life, or a CEO of a large company, the longer you live, the more likely you are to become susceptible to pressure from others. Recently in the news was a report that Donald Sterling, former owner of the Clippers and ultra-successful businessman, was unduly influenced to make decisions he would not normally make. So, regardless of your financial acumen today, it is important to name the proper people in your Durable Power of Attorney for Finances to manage and protect your finances in the future should the need arise. While this issue is not exclusive to estate planning without children, it certainly becomes a more likely situation.
Conservatorship
A conservatorship is the court supervised administration of your assets while you are alive. Without an estate plan, the probate court may determine that you are not able to manage your own finances and appoint someone else (a conservator) to make those decisions for you. Who will the court appoint? Courts usually give priority to family members. However, your closest blood relatives aren’t always the best individuals to manage your assets or the relatives that have your best interest in mind. Will the conservator maximize the use of your funds for your benefit, or will he or she save the assets for his or her own benefit when you die without an estate plan? Here’s a hint: the person the court appoints as your conservator is often times the same person that will inherit your assets when you die without an estate plan. Estate planning can avoid many of these conflicts.
If that wasn’t enough for you to want to avoid a conservatorship, they are also very expensive, time consuming and full of red tape. Even with an ideal conservator in place, your assets may be drained by the cost of the conservatorship administration.
Managing Your Health Care and Your Lifestyle
When you do not have children to care for you, an estate plan allows you to ensure that you maintain the proper health care and lifestyle that you want. Do you want to be forced to move to a skilled nursing facility? Do you want to be kept on life support for as long as possible? Whether you do or you don’t, these are decisions that should be made by you, not someone else. By preparing your estate plan and an Advance Health Care Directive, you can appoint the proper people to manage your health care, express your wishes with regard to life support, and continue to live in your home for as long as you want.
Without an estate plan, your conservator is likely to make many of these decisions for you. Do you trust that your court-appointed conservator will make the right decision? Estate planning can ensure the proper people are in place to manage your health care and lifestyle in your best interest.
Beneficiaries, Taxes and Expenses
When it comes to estate planning without children, whether you are the person that couldn’t care less about who receives your assets when you die, or you are the person that wants to control your assets well after your death, almost everyone prefers his or her assets to go to someone other than the IRS, courts and/or attorneys. However, without proper estate planning, a bulk of your assets could be paid in taxes, court fees or legal fees. Identifying the proper beneficiaries today, will help minimize costs to your beneficiaries in the future.
Each Orange County estate planning attorney at Modern Wealth Law focuses exclusively in the area of estate planning. Modern Wealth Law attorneys prepare customized estate plans for clients with a wide range of backgrounds, assets and goals, including those who don’t fit the standard “married couple and two kids” mold. If you are interested in preparing an estate plan that is focused on protecting you, contact our offices at Modern Wealth Law.
John Wong advises on all aspects of estate planning, probate, asset protection and trust administration. He believes that estate planning is about planning for life; while having protections in place should the unexpected occur.
