[00:00:00] Atty. James Jones: Welcome to Legacy Talk. I’m your host, James Jones. I’m an estate planning and probate attorney in Tacoma, Washington. I’ve been practicing for over 20 years and my main practice areas include estate planning, probate, and estate administration. On Legacy Talk, we discuss topics surrounding families and estates.
[00:00:20] Estate planning is often a confusing and complicated topic, but my goal with this podcast is to make it understandable and accessible to those who need it. So if this is something that interests you, I’d appreciate it if you click the subscribe button like this episode so that you can follow along as we break down the barriers of estate planning.
[00:00:38] I’m excited to get to today’s topic. Today’s topic is Child Free And Planning, The Relevance Of Estate Planning Even Without Kids, because estate planning benefits everyone, especially people without children.
[00:00:52] So on today’s show, we’re talking about the following topic, Child Free And Planning. The Relevance Of [00:01:00] Estate Planning Even Without Kids.
[00:01:01] So let’s get to it. Estate planning can often seem like a daunting task. You’ve got to figure out who’s going to be my executor. Who will get all my stuff, right? Where’s everything going to go? Imagine if you didn’t have kids or close relatives that you wanted to benefit from your estate. In too many instances, couples and individuals without kids leave their estate unplanned because they don’t know how to deal with it or even want to deal with it.
[00:01:28] They don’t have natural beneficiaries, it’s too difficult to put it all together, but that mindset is flawed. Well, it can be more difficult to determine where you want your estate to go when you don’t have a large family or children, it’s just as important. I have many clients that have well plans and robust estate plans that accomplish their goals and benefit the people and causes that they support, even though they don’t have children.
[00:01:53] So, today we’re going to discuss the reasons why it’s still beneficial to have an estate plan despite not [00:02:00] having children. And we’re going to talk about eight to ten things that we should have, right? Or reasons to do it, okay?
[00:02:07] Number one is the reason primarily that we do all of our estate planning, at least one of the biggest things, which is control.
[00:02:16] Control over assets. Without an estate plan, what happens? We’ve talked about this before. The estate determines where your stuff goes, the state has laws called the Laws of Entestacy, which determine where your estate goes if you don’t have a will. And that basically gives it to your family tree, essentially.
[00:02:34] So, parents, siblings, nieces and nephews, cousins, down the line, right? And so, oftentimes, if you don’t have a large family, or if you don’t have a family at all, that money is going to go to distant relatives that you may not even know. We’ve talked about that with my client from Japan who had no will, no children, no spouse, [00:03:00] and her plan and all of her assets are going to the people in Japan that she never knew.
[00:03:04] And so, estate planning allows you to direct your assets where you want them to go, to your friends or charities or things that you care about and things that you want to benefit after you’re gone. So that’s number one.
[00:03:14] Number two and three are kind of together. We’ve talked about this before. I’m all about the shout out in the episodes. I’m not sure why I’m talking about old episodes and new episodes. Anyway we’ve done an episode on durable powers of attorney, and durable powers of attorney there’s multiple different kinds, but primarily they deal with healthcare decisions and financial decisions.
[00:03:35] So, estate planning, if you listened along with this podcast, as you know, is not just about what happens when you are dead, okay? Estate planning isn’t just about assets, it’s about dealing with things like healthcare decisions or financial decisions if you’re incapacitated, your well being, right?
[00:03:56] Healthcare directives and living wills enable [00:04:00] you to outline your wishes for medical treatment and nominate someone or name someone to make those decisions for you, on your behalf if you’re not able to make them someone that you trust on the financial side.
[00:04:13] The financial durable power of attorney allows you to designate someone to manage your financial affairs if you are incapacitated, it’s crucial to choose someone trustworthy we’ve done an episode on this things that we should consider in choosing an executor same thing applies for a durable power of attorney. The reason why is these people have access to your money, right?
[00:04:30] Your bank accounts, investments, they can pay your bills, they can manage everything for you. And so you want to make sure that person is someone you trust. So healthcare directive, healthcare durable power of attorney, financial durable power of attorney is number two. Two A and B I guess we could say.
[00:04:45] Three, or four if we didn’t skip three before. Avoiding probate. A lot of people say, you know, especially people that don’t have families or kids say, what do I care? I’m not [00:05:00] around, right? And in reality, like, there’s no one that they care of, I guess if they have an extended family or siblings or parents or nieces and nephews that they want to deal with, they’d probably care if you didn’t have a will or had to go through probate.
[00:05:13] But probably it’s not a great thing as we’ve talked about. It’s time consuming, it takes a lot of money, and avoiding probate, even though you don’t have children or an extended family that you’re benefiting is still worth avoiding, right? Doing a provocable trust instead of a will, making sure that your beneficiary designation is correct.
[00:05:33] Those kinds of things can help you avoid probate and save time and money and hassle and all those things. And the other thing is, if you don’t have a plan, If you don’t have a plan at all, right, we go back to control of our asset distribution and avoiding probate, those things go hand in hand. So if you don’t have a plan at all, who runs it for you, right?
[00:05:53] If you don’t have a spouse or if you don’t have kids, if you don’t have close family, it’s going to be a crapshoot as to who runs this thing, right? [00:06:00] And almost anybody could run it for you. And so, if you want to make sure you have control of where your estate goes and who runs it, the estate plan is essential.
[00:06:08] Number five. This goes hand in hand with number three, with two A and B, I guess we’ll say. The durable power of attorney for healthcare and finance. Even if you don’t have children, a guardianship appointment could be important, right? Typically on a durable power of attorney that I write, it has a provision that says if I need a guardian for whatever reason, you shouldn’t have to have one if you have a durable power of attorney.
[00:06:33] Because a durable power of attorney can do the same thing, essentially, as a guardian. But if you don’t have a functional durable power of attorney, or if it doesn’t have all the things that you need it to have, you might need a guardian to help make decisions for you, or a conservator. And so, designating that person in your durable power of attorney can be significant.
[00:06:52] Because then the court doesn’t determine where that, who that person is, or where they come from, you do. Okay? So, designating those kinds of things in your durable power of [00:07:00] attorney in the worst of worst case scenarios only really is essential.
[00:07:04] Number six. So there might be five, I don’t know. This is a big thing for people that don’t have large families or don’t have families that are close to them, don’t have children to benefit charitable giving. And this is something that’s so important to put into your plan, because if you don’t, the charity gets nothing, right? There’s no intestate law that says, well, if Bob doesn’t have any kids when he dies, then we’ll give it to his favorite charity instead, that’s not a thing, right?
[00:07:32] And so, in order to make sure that the charitable entities and causes that you support are benefited or continue to be benefited when you’re gone. Putting those people or entities or causes in your estate plan is super important, right? You can make a lasting legacy through these charitable gifts, whether it’s a lump sum percentage of your estate or a bit, you know, an ongoing sort of endowment kind of thing.
[00:07:58] You can support [00:08:00] these kinds of causes through your state plan, otherwise they get nothing from you, right? Otherwise they get nothing and these interests really, you know, most of these charitable entities really need the money. So if you like them and you’d like to support them now, you could consider supporting them when you’re gone.
[00:08:16] Number seven, pet care. We’ve haven’t talked about a pet trust. I don’t think yet on this podcast, but I do a lot of pet trusts. Have you heard of a pet trust before? Anyway, a pet trust basically is a trust for the benefit of a pet. Okay? So you’re setting up a trust to benefit your pets. Okay? And for people that don’t have children oftentimes they have dogs or cats or all types of animals, I don’t know. What kind of animals do you have?
[00:08:48] Anyway pets are important right? They’re part of the family, I’ve got two dogs, they’re part of the family. I also have five kids the two dogs are just as much a part of the family as five kids, but having a pet trust really [00:09:00] enables you to basically give someone some money and resources to make sure your pets have a good rest of their life.
[00:09:06] If you go before them, right? It can cover maintenance, room and board, veterinary bills, all those kinds of things. And so, financial resources make taking that dog or cat or whatever you got, maybe you’ve got like a large tortoise or something that might be interesting.
[00:09:22] It makes people that have these pigs in the house now too, like those potbelly pigs or some of those little pigs people have those now too maybe you have a pig anyway having a pet trust with some money makes taking that pig a lot easier than saying Well, Bob gave me this pig, but I’m not sure how I’m going to afford it.
[00:09:41] So pet trusts are a great way to do it, and you can take care of your pets in your state plan. It doesn’t have to be a human individual to be benefited. Okay?
[00:09:50] Number eight, digital assets. So this is a big thing, everybody has social media accounts, we all have online banking, right? [00:10:00] We’ve got trading accounts, maybe of Charles Schwab or what used to be TD Ameritrade or whatever, right?
[00:10:06] You’ve got some kind of online bank account, online investment account, Robinhood, I don’t know, that basically only exists online, right? You don’t get paper statements, you don’t have any like literature that’s printed and in a file cabinet somewhere, all of it’s online.
[00:10:21] And so digital assets and where your stuff is, and what your passwords are, your login credentials are, is super important to have as part of your estate plan. I’ve recently started over the last few years, giving people a document to put all that kind of stuff together. Because the worst thing is if somebody dies without a will and doesn’t have like a spouse or partner or close children that are helping them, that stuff can be lost, right?
[00:10:50] And so having a list of your accounts, your logins, your online ID’s, things like that is super important. There’s also digital currency [00:11:00] issues like photos, like family photos are all on the cloud now, they’re all on like Google photos or Apple photos or whatever. All that stuff should be laid out in an estate plan, at least on a separate sheet of some kind.
[00:11:13] All that stuff should be in there and laid out so that whoever takes control of your estate can manage it. And that’s what doesn’t get lost, really it could get lost.
[00:11:22] Number nine, this goes back to who, what do I care? I don’t have any family that’s going to benefit from this.
[00:11:27] Number nine is a state taxes. I’ve got clients that don’t have kids, I’ve got a lot of clients that don’t have kids. Okay? One in particular has a large taxable estate, it took them a while to come around to the fact that, well, we shouldn’t pay the government more than we have to pay them.
[00:11:42] We started with a simple will, despite the fact that they had a taxable estate, they didn’t care. They didn’t care about probate, they didn’t care about taxes. We did a will just so that they could give the stuff where they wanted to give it, but they came around, right? Because it turns out that paying the government 20% or more of your estate, [00:12:00] 45% of your estate isn’t great.
[00:12:03] And so, making sure that you have adequate provision for estate taxes so you can maximize your exemptions and minimize tax isn’t important to do. So even if you don’t have kids, if you want to benefit charities or if you want to benefit other family members, having the estate taxes planned for makes sense, right?
[00:12:24] Finally, the last thing is number 10, and this is for everybody. But I think, if you don’t have a close family and I’m not, I have a family, I’ve got a big family, right? I’ve got five kids, two dogs, a wife. You know, I’ve got a large family by today’s standards, but we’re all looking for peace of mind. Right?
[00:12:44] And I think that If you don’t have that family, and you don’t have the natural beneficiaries, like my natural beneficiaries are my wife and kids, right? But if you’re not married, who are your natural beneficiaries? Your mom and dad? Your brother? I don’t know. If you’re married without [00:13:00] kids, where does your stuff go, right? You don’t really have a natural beneficiary.
[00:13:04] And so, wondering about that, like, where does my stuff go if I’m gone? Can train someone, right? And so getting that peace of mind, a well thought out and planned estate plan really can contribute to better mindset, knowing that your affairs are in order, your wishes will be honored.
[00:13:21] And so, making thoughtful decisions about how to protect your legacy now and ensure that your assets are distributed the way you want them to distribute it, and in a way that reflects your life and your values and what legacy you want to leave can lead to significant peace of mind.
[00:13:36] So that was our 10, 9, things to consider, or things that are important, even if you’re not having kids, or don’t have kids, or weren’t able to have kids, or whatever reason to have an estate plan.
[00:13:49] And so, that brings us to our story time. So I’ve got a lot of clients, like I said, I’ve got a lot of clients that don’t have children. I’ve got a lot of different clients from all walks of life. Like you would imagine I’ve been doing this [00:14:00] 21 years and that’s great. The variety and diversity of my clientele is super interesting and I’m thankful for them all.
[00:14:07] And it keeps me on my toes, right? Cause not everything’s the same. We don’t do cookie cutter plans because of it.
[00:14:12] So, I’ve got a client that I just met with a married couple, they got married later in life, neither of them have any kids and they’re not planning on having kids or adopting or anything like that, but they have a big extended family.
[00:14:25] So, each of them has siblings and each of them has nieces and nephews and things like that. And they also have charitable things and entities that they want to benefit. So, I met with them not too long ago and we went through and we talked about, you know, where are we going to give everything and how are we going to give it?
[00:14:42] And they really want to help their siblings pay for their nieces and nephews education. They want to make sure that the nieces and nephews have a good college education, like they have opportunity in life. And they also want to benefit certain charities, right? Educational charities, [00:15:00] service oriented charities, right? Humanitarian aid entities, their church.
[00:15:05] And so we laid all this stuff out, right? That’s so much is going to nieces and nephews, so much is going to charitable entities, and this is how we’re going to do it. And this is where it’s going to go and this is how it should be spent. And so, it’s really also, I guess the throw in on that is they’ll avoid probate and they’ll avoid estate taxes because they have as taxable estate.
[00:15:26] And so, it’ll make it way easier for their family and the beneficiaries to deal with their estate when they’re gone. So that’s one example.
[00:15:35] And the other example is, these people are an older couple, you know, 70’s or so. They have no kids, right? And they don’t have a family either, they’re like only children, both of them, or maybe they’re, I can’t remember what the wife is, she doesn’t have a real family either.
[00:15:54] And so, they want to make sure that all of their money goes to charitable entities that they have. And so they have lots [00:16:00] of different charities that they want to benefit, like a certain amount here, a certain amount there. And then they want the remainder to go to one central charity that’s really their favorite, okay?
[00:16:11] The other thing that they have is like intellectual property. You know, they’ve got art, they’ve got writings, they’ve got music. The guy was a recording, musical recording artist, you know, and so he’s got a lot of music. His wife has a lot of books and literature on certain topics. And she’s donating that to a certain entity that likes those topics or like sort of deals with those topics as well.
[00:16:35] And they’re super happy, like, I was like, well, you probably should call them and make sure they’re going to take that room full of books. And they called him and they talked to him and they want it, right? These entities, these charities want your unique stuff, right? Stuff that would benefit others.
[00:16:50] And so, that couple really, you know, they did charitable stuff, they made sure that their intellectual property, like their music, their art can live on when they’re gone. And [00:17:00] then, they wanted to make sure that their stuff, particularly their unique stuff, like their library of a certain type of book, right?
[00:17:07] It’s a certain type of book on its type of topic goes to an organization that’s going to use that book and not get donated or chucked at Goodwill, right? They’re putting those bins for books that they’ll just chuck them, right? They don’t want them, there’s going to recycle them, but that they found a place that really wants this stuff, they want the library of books.
[00:17:28] And so, that’s a success, right? That’s a win, that’s peace of mind, that’s creating a legacy that otherwise without an estate plan, they wouldn’t have been able to do. And so, that’s really what gets me going as far as dealing with estate plans like this, dealing with all these different types of clients and types of plans is that we can really make a meaningful difference or contribute in a meaningful way to someone’s life, to their peace of mind, to their ongoing legacy, and so, that’s really [00:18:00] what’s the motivator for me.
[00:18:02] And so, even if you don’t have children or don’t have a large family or don’t want to give anything to your kids, having an estate plan is super important.
[00:18:11] So that’s it, that’s our episode for today. I think we’ve talked about that enough. Hopefully it was informative for you, hopefully come back for more.
[00:18:20] I’d like to thank you for listening to today’s episode of legacy talk. If you liked today’s episode and would like to learn more, please like, and subscribe for more great content.
[00:18:30] I’ve been your host, James Jones to your legacy.
