Estate planning is an essential part of life, as leaving a legacy, creating generational wealth and protecting lifelong assets are crucial for many Americans. It also provides peace of mind and may alleviate bureaucratic complications in the future. Yet, 55% of Americans don’t have an estate plan, “leaving their wishes—and their loved ones—unprotected,” Trust and Will notes.
And for adults without children— either by choice, circumstances, or because their only child died— thinking about estate planning can take on a different meaning and mean a different endeavor. These adults represent a significant chunk of the U.S. population, as 23% of adults in their 50s and 22% of those in their 60s don’t have children.
For them, creating a well-thought-out estate plan can be very different from those who have direct heirs and can seem overwhelming.
“The entire estate planning system is based on the assumption that you have a next of kin, usually a child. When you don’t have a next of kin, it results in what we call the “fiduciary void,” said Dr. Jay Zigmont, PhD, CFP, and founder of Childfree Wealth and Childfree Trust.
That’s why many experts say that creating an estate plan for adults without children is extremely important, as several different factors must be taken into account.
What considerations should these adults take?
First, it’s key to know that there are also different matters to consider beyond the financial aspect of estate planning.
As Zigmont noted, many people feel like they don’t need an estate plan because they don’t have a large estate, which isn’t true. Your estate plan includes appointing a medical power of attorney (POA), financial POA, executor, and trustee, he said.
“The key is that you are appointing people to follow your directions and make decisions for you both while alive and after you pass,” Zigmont added.
But for adults who don’t have someone to appoint as their POA, executor, and trustee, the fiduciary void is filled by healthcare providers and court-appointed guardians or conservators, he said—something that can come with a set of issues.
“A court-appointed guardian or conservator doesn’t know you, but is required to make decisions for you, which no one really wants. Additionally, if you do not have a will and specify where you want your stuff to go, the state may take those assets for its general fund,” he said.
As such, Zigmont said it is as important, if not more so, for people without children to get an estate plan in place ASAP.
“It doesn’t matter what your age is, or what your assets are, you want to make the choice in who makes decisions for you by putting in place an estate plan,” he said, adding that a complete estate plan includes a variety of documents, including the medical POA (also called a healthcare proxy), financial POA, will, and trust.
“While trusts are usually used to protect large amounts of assets, in this case, the trust is designed specifically to protect you as a person and your pets if you have any,” he added.
Heath Harris, founding financial advisor at Compound Advisory, echoed the sentiment, saying that for these adults, planning is about being clear, in charge, and less likely to cause issues.
“It is about making sure things transfer with intent and ease,” he said.
What are the challenges?
You can use online services to create a will and then get it notarized, but the challenge for adults who don’t have children is who to appoint as your POAs, executor, and trustee.
Zigmont said that many of his clients start by listing their parents as their POA and executor, but that is “going in the wrong direction.” Others ask friends to fill the roles, but that is a lot of responsibility to put on a friend, he added.
“It is common for childfree people to say they want a ‘golden girls home’ with friends watching out for each other and being each other’s POA. The problem is that the last person in that friend group to die is out of luck,” he added.
Compounding the issue, some solutions are state-specific and would need to be changed every time you move. For instance, Zigmont said that in California or Arizona, you can appoint a professional fiduciary to serve as your medical POA, financial POA, executor, and trustee.
Meanwhile, in other states, you can look for estate attorneys and/or trust companies to serve as a professional fiduciary, but they are unlikely to take on the medical POA piece.
What are the options?
Ciara E. Lister, Esq., co-founder of estate planning firm Legado, said the more clarity you build into your trust, the less room there is for family conflict later.
She says the simplest and most flexible option is a Revocable Living Trust (RLT).
“It avoids probate, keeps your wishes private, and can be updated anytime. You can leave assets to family, friends, or charities, and you can also include special provisions—like setting aside funds for a cause you care about or creating a pet trust for your animals,” she said.
There can also be some tax implications, as the way assets are passed can make a difference.
For instance, Lister explained that transfers to nieces and nephews can raise generation-skipping tax questions, and some states tax siblings, cousins, or friends at higher rates than children.
“The good news is that with an RLT, you’re not locked into today’s choices—you always reserve the right to update. That flexibility is the best protection against changing laws and shifting circumstances,” she added.
Howard Enders, COO of The Estate Registry, a digital estate management platform, echoed the sentiment, saying that with no natural “default” heir, creating a trust is even more critical. He said that failing to put clear plans in place may mean that your estate ends up in an extended probate process or is distributed to a relative you may not have chosen.
“A trust avoids that uncertainty and provides peace of mind, while also sparing your loved ones from the legal delays or disputes that can occur during an already difficult time,” Enders added.