Certified financial planner Mike Keeler has a client, a retired teacher, who saved diligently for her golden years and will leave behind a sizable estate when she passes away. Her estate-planning challenge, though, is that she has no children.
It’s a situation financial advisors come across frequently: Childless clients who are unsure what should happen to assets they leave behind or whom to appoint as their proxy decision-maker.
“Sometimes there is no close family, and the person doesn’t know who to leave their estate to,” said Keeler, CEO of Peak Financial Solutions. “They also don’t know who to name as executor of their will or who they trust to make decisions for them if they are [incapacitated while still living]. These can be tough decisions.”
While specific data on estate planning among the childless is hard to come by, studies show that most people fail to put in place even the most basic part of estate planning: a will. For instance, a 2016 Rocket Lawyer study conducted by Harris Poll shows that 64 percent of Americans lack that basic document.
The problem with having no will (called dying intestate) is that your state’s court system decides who gets your assets. And on top of property-related considerations are other important estate-planning components, regardless of marital or parental status.
But decisions that can be hard enough for people with family ties or close friends become harder for those without those relationships. When that’s the case, advisors start by encouraging people to focus on their interests and tie them to charitable giving.
“I find out what they’re passionate about,” Keeler said. “When they start thinking about the possibilities and the gears start turning in their heads, it can be a fun conversation.”
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