Estate planning with no family
Part of the estate planning process is determining how to divide your assets among your heirs. But what happens if you do not have any immediate family members to inherit your estate after your death? Do you really need to have an estate plan?
The answer is “yes!” Even if you’re single, have no children, or any other immediate family, you want to have an estate plan in place unless you want your assets to go to the state in which you live. If you die “intestate,” which means without a will and without heirs, your assets become “escheated”; in other words, California will lay claim to them.
If you’re considering what you can do to avoid this scenario, creating a will is one of the most basic steps one can take. When creating a will, the main thing to decide is to whom you want to leave your assets. You can choose to leave them to alternative heirs, such as an extended family member, a friend, or a charitable organization or even include instructions for some of your assets to be used to care for a pet after you are gone.
It’s still important
While choosing a beneficiary or beneficiaries to inherit your assets is one of the most important parts of estate planning, you’ll also need to choose an executor whose job it will be to oversee the distribution of your assets. An executor should be someone that you trust and who is also agreeable to serving in this capacity.
You will also need to choose a beneficiary for each of your life insurance policies and for your retirement accounts because these types of accounts don’t pass through a will. To do this, complete a beneficiary form which designates how the proceeds of your life insurance and retirement accounts are to be inherited. You may also designate a beneficiary on a taxable account by completing a Transfer of Death (TOD) designation.
Another important facet of the estate planning process for people without heirs is naming a power-of-attorney. A POA is to manage your financial affairs and a medical power-of-attorney will make important health care decisions should you become incapacitated.
There are several estate planning options available to those without heirs. A living trust is a good option because, unlike a will, your beneficiaries won’t have to go through the probate process, are able to receive assets more quickly, and it’s private.
Talking to a professional
There are a variety of trusts from which to choose; choosing the one that best fits your situation is important. For example, if you have no heirs or other beneficiaries, you may want to consider a “charitable remainder trust”. An experienced estate planning attorney will help you put an estate plan in place that gives you control of who will inherit your assets after you’re gone.
David Foley, California living trust attorney, has been specializing in estate planning since 1990. Contact us to discuss all of your estate planning needs.Schedule your FREE Consultation