In many ways, estate planning is relatively simple for people who have children. They expect their adult children to be involved in their care as they age and are usually named beneficiaries of their wills. For those key steps for Estate Planning when you don’t have children, according to a recent article from The Wall Street Journal, “Estate-Planning Priorities for People Without Children,” estate planning becomes a bit more complicated.
Three key steps for Estate Planning when you don’t have children, seniors need to face serious questions to prepare for aging, from who will be in charge if I become sick to who is going to be in charge of my funeral. There are three key steps that single people without children need to address.
Plan for Long-Term Care. One study determined that the average 65-year-old will need about $150,000 for healthcare during retirement. For people with no children, long-term care insurance is something to purchase in mid-life, starting around 40 years old. If no next of kin is available to provide care, the policy can cover some of the costs of home care or care in a nursing facility.
Fewer companies sell long-term insurance today than in the past. However, policies are still available. Many are sold as hybrid policies, incorporating life insurance and long-term care coverage. Others allow policy owners to take out at least part of the money contributed as cash. Some even have a death benefit. Others have an inflation rider to protect against rising costs.
Determine who you can count on for help. Without children, people generally turn to their spouses if they have one, siblings, nieces, or nephews to take on roles like Health Care Proxy or Durable Financial Power of Attorney. The people chosen for these roles can also be friends as long as they are reliable and trustworthy.
If no family members are available, consider a friend or neighbor, preferably someone younger. Often single agers name other single agers for important roles, which leaves them all vulnerable to the possibility of disability or death of their trusted decision makers. Other options include doctors, estate planning attorneys, financial advisers, or a social worker to serve as healthcare proxies. A bill-paying service might be in an excellent position to serve as a Durable POA as long as the relationship is established before it’s needed and the service is ethical.
Power of Attorney and many similar estate planning documents are state-specific, so meet with an estate planning attorney in your state to be sure you have the documents you need and that they are valid. Discuss the roles of the people you pick to eliminate any surprises. A secondary person should consistently be named if the primary POA is unavailable or chooses not to take on the role when the time comes.
Make the executor’s life easier with detailed preparations. This applies to people with children, as well as childless people. Check your beneficiary designations on financial accounts, including life insurance, investments and retirement funds. Write down your wishes for funerals or other types of memorial services. Have an estate planning attorney create a will and a trust, if appropriate, and tell the person you’ve chosen as executor where these documents can be found. Don’t make a difficult job harder by making them search through paper files and your computer to figure out your estate.
Your estate planning attorney will be able to provide guidance about how to address the issues accompanying a child-free life. These extra steps will give you considerable peace of mind.
To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.
Reference: The Wall Street Journal (Nov. 12, 2024) “Estate-Planning Priorities for People Without Children”
