If you have no children, estate planning becomes more important than ever. If you fail to take the right action now, many decisions later on may be made by other people — even people you don't know. To prevent this, you can take a variety of steps depending on your finances and goals. Here are a few of the most valuable estate planning steps.
1. Sign Medical Directives
Any childless individual should have in place legal documents providing for care if they become incapacitated. These generally include an advance directive for health care and a durable power of attorney for legal and financial decisions. These let you name the person(s) whom you want deciding your medical care and allows them to access your funds to ensure care is available.
2. Draft a Legal Will
A will is the most foundational of all estate plan documents. Although a will must still go through probate, it allows you to make known your wishes. You can name who you want to execute your will and which assets go to whom. The will must be legally enforceable, though, or it won't protect these rights. If a will is invalidated, the court will use its standard metrics to determine who gets your estate.
3. Use Beneficiaries
One easy way to be certain you can name your heirs is to have the right beneficiary designations in place. Most accounts — such as brokerage accounts and bank accounts — permit you to name individuals or others as beneficiaries for specific accounts or percentages of the total amount. Beneficiary designations generally do not have to go through court probate, and they can serve as just a part of the overall puzzle of your estate plan.
4. Consider a Trust
Trusts are an important legal estate planning tool for several reasons. First, using a trust prevents the interference of a probate court. It also keeps matters private, reducing any questioning of your wishes. And you can appoint someone you trust — a friend, family member, or even an attorney — to be the trustee.
5. Work With a Pro
The best way to ensure that no one is granted decision-making powers you don't want is to consult with a professional estate planner. They know the common pitfalls when planning, how to draft legally enforceable documents, and which legal and financial tools fit your personal circumstances.
Want to know more about estate planning for those who won't leave behind children? Start by meeting with an estate planning attorney in your state today.