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Estate Planning for the Child-Free

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“Estate Planning for the Child-Free” by Attorney Laura Curry (Audio)

A common misconception about estate planning is that the process is only important for couples or individuals with children. However, estate planning is critical for those who are child-free. Deciding who will manage your estate and receive your assets can often be more difficult if you don’t have direct heirs that can step into those roles.  Here are some helpful tips to those without children to think about when creating your estate plan.

  1. Start Planning Early. The unfortunate reality that we live in is that anything can happen so it is best to make an estate plan as early as possible. A comprehensive estate plan will include a legal blueprint in the event that you are incapacitated and upon death. A living trust, financial power of attorney and healthcare power of attorney are necessary legal documents that will allow someone else to step into your shoes to manage your affairs in the event of your disability.
  2. Leaving money to charity is always an option. If you don’t have heirs, leaving money to organizations or causes that hold meaning to you could be a good option. You can accomplish your philanthropic goal by leaving a specific dollar amount to your favorite charity or dividing your estate by percentage to include organizations that are significant to you.
  3. Think about taxes. If you decide to leave money to certain family members or friends, you could trigger additional tax consequences.  Many states have an inheritance tax. In Maryland, the inheritance tax is currently 10% on the first dollar you leave a non-exempt beneficiary. Under Maryland law, exempt beneficiaries include your spouse, children, grandchildren, parents and siblings. This means that if you plan to leave your estate to nieces, nephews, cousins or non-family members then the inheritance tax will be assessed in Maryland. You can designate in your documents whether you want that beneficiary to be responsible for paying the tax or whether you want your estate or trust to pay the tax.
  4. Consider appointing a corporate trustee. One of the most difficult decisions in estate planning for someone who does not have children is choosing the right person to appoint as their trustee or executor. Many do not wish to burden their friends or distant relatives with the responsibility of managing their estate. Your estate planning attorney may recommend a corporate trustee as a solution. A corporate trustee is a bank trust department, trust company or an attorney that can act as the fiduciary of your estate to distribute your assets upon your death.

Please contact us at Sinclair Prosser Gasior today to start your estate plan or join us at an upcoming estate planning workshop to learn more about your options! 

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