No Heirs? 5 Reasons Estate Planning Is Even More Important
A person who has no direct heirs (like a spouse, partner, or children) may think that estate planning is less important than for those with a family. But in fact, it is more important for those without heirs. Here are a few reasons why you should still take up estate planning.
1. The State Could Decide.
If no instructions for their assets when a person passes away, the state in which they live will decide who gets what. States have a predetermined list of biological and family heirs in the order of inheritance. So, someone in your extended family will get your assets without regard to your personal relationship with them. And if no one steps forward, the state may end up with your assets instead.
2. Someone Must Execute the Estate.
Even if you don't care who gets what, someone will be forced to take on the role of an executor or personal representative to handle things like selling assets, distributing these, filing final tax forms, and obtaining legal documents. This isn't a job most people want, and it's not a good fit for many. Would it be better for you to decide who will do this task rather than put anyone in an unwanted position?
3. Anyone Can Inherit.
Just because you don't have immediate family members doesn't mean you can't create heirs. Because anyone can inherit money, consider whom in your life you care about. It could be friends, coworkers, neighbors, distant relatives, pets, or even your 7th-grade teacher. Freed of the need to provide for immediate family, you can make a real difference in the life of someone else you love.
4. You Need End-of-Life Planning.
Estate planning isn't just about leaving money after you're gone. It also includes preparing for your own illness or death. And when you have no immediate family members to make health or financial decisions if you can't, it's more important that you designate someone. Avoiding this task leaves you at risk.
5. You Can Leave a Legacy.
When you don't have to leave your estate to family, you can instead look at ways to leave a larger legacy that will outlive you. Support your favorite charity. Set up a charitable remainder trust. Create a private foundation. Or gift money annually to drain your estate slowly. The methods are customizable, but the result is that your legacy will be remembered by organizations and beneficiaries you want to support.
The best way to start estate planning is to meet with an experienced attorney in your state. They can help you learn about and meet the challenges of estate planning for those with no immediate heirs. And then you will know that no matter what happens, your assets will do the most good.