It's a common misconception to think that if you don't have children, you don't need to worry about estate planning. But the fact is, it can be even more important to do estate planning if you have no children.
Some of the common thoughts behind this mistaken belief may take one of these forms:
“If I die, everything will pass to my spouse anyway, so why bother?”
“I’m single with little wealth, so who cares who gets my few meager assets?”
“Estate planning is an expensive hassle and it doesn’t even benefit me because I’ll be dead, so I’m better off letting a judge handle things.”
This kind of thinking ignores several basic facts about both estate planning and life in general. Regardless of your marital status, if you don’t have children, you face potential estate-planning complications which those with children do not. And this is true whether you’re wealthy or have very limited assets.
Without proper estate planning, you’re not only jeopardizing your personal property, but you’re putting your life at risk, too. And that’s not even mentioning the potential conflict and expense you’re leaving for your surviving family and friends to deal with.
So if you’re childless, consider these three inconvenient truths before you decide to forego estate planning.
1. Someone will get your stuff
Whether you’re rich, poor, or somewhere in between, in the event of your death everything you own will be passed on to someone. Without a will or trust, your assets will go through probate, where a judge and state law will decide who gets everything you own. In the event no family steps forward, your assets will become property of your state government.
Why give the state everything you worked your life to build? And even if you have little financial wealth, you undoubtedly own a few sentimental items, including pets, that you’d like to pass to a close friend or favorite charity.
However, it’s rare for someone to die without any family members stepping forward. It’s far more likely that some relative you haven’t spoken with in years will come out of the woodwork to stake a claim. Without a will or trust, state laws establish which family member has the priority inheritance. If you’re unmarried with no children, this hierarchy typically puts parents first, then siblings, then more distant relatives like nieces, nephews, uncles, aunts, and cousins.
Depending on your family, this could have a potentially dangerous—even deadly—outcome. For instance, what if your closest living relative is your estranged brother with serious addiction issues? Or what if your assets are passed on to a niece who’s still a child and likely to squander the inheritance?
And if your estate does contain significant wealth and assets, this could lead to a costly and contentious court battle, with all of your relatives hiring expensive lawyers to fight over your estate—which is exactly what’s happening with Prince’s family right now.
Finally, even if you have a spouse and your assets are passed to him or her, there’s no guarantee they’ll live much longer than you. In the event of their death without a will or a trust, everything goes to his or her family, regardless of the fact that you can’t stand your in-laws.
Do you want your spouse’s sister, brother, parents (or the new spouse he or she marries after you die) inheriting what you’ve worked so hard for?
Look for part two of this blog here to find out how you could be leaving yourself at risk.