Despite most people believing it’s important to have an estate plan, only about 40% of people actually get one. There are a number of reasons that someone may not have gotten an estate plan but the idea that you do not need one because you do not have kids should not be one of those reasons. In fact, it could be argued that not having kids actually increases your need for a well-crafted estate plan. If you do not chose who receives your property and who is in charge of managing your property, then the state of Texas will decide for you. Without kids, Texas’ default rules often produce results that are dramatically different than you might think.
Decide Who Makes Decisions.
A complete estate plan should include powers of attorney allowing you to designate who will make financial and medical decisions while you are alive but incapable of making decisions for yourself (i.e. incapacitated). Using a power of attorney for this purpose allows you to pick who will be making those decisions on your behalf, and allows your chosen agent to make those decisions without the need to open a guardianship proceeding with the court. That is a two-fold benefit. First, managing your affairs through a guardianship is costly and slow. Second, you will have no control over who the court appoints as your guardian, and it may prove to be the last person you would have chosen. Similarly, your will or trust can be used to decide who will control the process of distributing your property after your passing.
Settle who gets the property and how it is used.
Every state has default rules that determine where property goes if someone dies without a valid plan distributing their property. In many cases your spouse will receive all or the bulk of your property but not always. In certain cases, a property interest will bypass your spouse and end up in the hands of a parent, sibling, niece or nephew that you had no plan to benefit. By completing your estate plan complete you can take control of who gets your property and how it is used. For instance, you may direct that the funds be held in trust to care for your parents, if they survive you, and then pass to your chosen family members or charities. Texas also allows you to create a trust that is used to care for your pets during their life and then leave the funds to a person or charity after the pet passes. If you do leave a gift to a charity your plan can include directions (or in some cases strict conditions) regarding how the funds may or may not be used.
With or without kids there are decisions to be made about your property when you are incapacitated or dead. A well-crafted estate plan can make sure that your wishes and desires are carried out by someone that you trust instead of a court appointee applying Texas’ default rules.