There exist many misconceptions regarding estate planning, one of which is that it is not necessary if you do not have children. When you pass away, your assets — regardless of how plentiful or minimal they are — must go to someone or some entity. If you do not decide where they will go, the state of North Carolina will do it for you. You can keep all of your beloved belongings from going to your cranky great uncle and ensure that they instead go to your favorite cousin by drafting a will or estate plan.
If you struggle when it comes to estate planning, you are not alone, which is why Kiplinger has put together a few pointers for those sans children. Regardless of whether or not you have children, you are not immune from incapacitation. Your estate plan should contain an advanced directive for health care and appoint a durable power of attorney. Advanced directives allow you to determine who will make health care, legal and financial decisions on your behalf should a health condition render you incapable of doing so yourself.
You should also consider forming a trust. Though a will has its merits, a trust provides several advantages a will does not. For one, a trust helps to avoid probate at your death, which can save your family considerable time and cost. Two, a trust helps to reduce estate and gift taxes and serves to protect your assets from lawsuits and creditors upon your death. Finally, a trust allows you to place conditions on how and when the trustee distributes your assets upon your death. For instance, if you wish to leave your estate to your niece, you may stipulate she can only receive it after graduating from college.
If you do form a trust, it is essential to appoint a trustee whom you trust to fulfill your wishes. You want to make sure you appoint a trustee who is responsible, trustworthy and organized. If there is no one in your life that meets those basic standards, you may wish to appoint a professional, such as a banker, attorney or accountant.
Finally, though you may not have children, you likely have pets. Your estate plan should establish what is to become of your pets when you are no longer around to care for them. This step is important if you wish to ensure the continued health and wellbeing of your pets after you pass.
This article should not be construed as legal advice. It is for educational purposes only.