For most people, estate planning serves as a way to leave valuable assets behind to their children and other loved ones. Directing their property to named beneficiaries provides clear direction, if not peace of mind for them and their family.
However, what do individuals or couples do when they built up valuable estates over many years, only to have no children, close family members or other heirs as possible beneficiaries? Challenges exist when they have seemingly no one to leave their assets to or name as executors to their wills, healthcare proxies or powers of attorney.
Many financial advisors who work with these types of clients try to identify their interests and passions. Their assets can find a home through charitable giving. For example, foundations can award scholarships to college-bound children and not necessarily upon their death. Playing an active role in their charity puts them in important decision-making roles.
In situations where assets include 401(k) or life insurance policies, married couples without children usually name each other as beneficiaries. However, upon the death of one spouse, the surviving spouse has few, if any options regarding the disposal of the remaining funds. The same scenario applies to unmarried people.
Potential personal representatives legally charged with handling an estate can be as close as the local bank. Many have trust divisions where the financial institution is named as executor. However, unlike friends or family members having control, banks will charge a fee.
Perhaps the most difficult positions for the childless to involve naming someone to make the intimate decision with come with healthcare. For many, the only option may be a close and trusted friend to serve as an agent upon incapacity.
Estate planning is a highly personal, yet complex process that requires a tailored approach based on your assets and family situation. Retaining an experienced and knowledgeable attorney for help is an important first step.