When it comes to estate planning, one of the most important parts are knowing how you’ll divide your assets. You must take all things into consideration. Even if you are single and childless, there are still plenty of factors that play into estate planning. Regardless of whether or not you have any heirs or immediate family, everyone needs to have an estate plan. Without a proper plan in place, the state will figure it out for you. No one wants that to happen. If you want to know what you can do, read our guide on estate planning with no heirs.
Why You Need To Create A Will
When you are estate planning with no heirs, one of the first steps to take is to create a will. Individuals who die without a will are referred to as “intestate”. Intestate means that the state which you resided in will divvy up your assets as it sees fit. The outcome will not be as you intended. When there are no heirs, your property becomes “escheated”, which means the state keeps it. Having a will would change how your assets are managed after you pass.
Should I add my family members name on my assets and avoid a will?
The Hierarchy of Inheritance
In the estate planning process, there is a hierarchy when it comes to inheritance. However, the order of the hierarchy differs state by state. The order typically goes: surviving spouse, children, and grandchildren. If these roles are not filled, the next relatives would be parents, grandparents, siblings, nephews, and nieces. If you do not have any immediate heirs such as children, assets can be abdicated to a parent, sibling, niece, or nephew.
Other Beneficiaries Such as Individuals, Friends, Foundations or Charitable Organizations
If you so choose, you can name anyone a beneficiary in your will. Anyone can inherit your assets. Keep in mind that some states levy inheritance taxes. These taxes may be higher for non-relatives than relatives. Many individuals have a philanthropy, foundation or charitable organization in mind and choose to donate their assets.
When you choose to name a charity organization in your will, there are a few routes to take:
- Charitable Remainder Trusts – These are trusts where the donor receives a passive income stream from the trust for years or life, and designates a charity that receives the remains of the assets upon the donor’s death
- Donor-Advised Funds – This is when a donor makes an irrevocable, tax-deductible contribution of cash, securities or appreciated non-cash assets. As a donor you can invest those funds for potential growth and recommend grants to qualified 501(c)(3) charities.
- Private Foundations – Private organizations are charitable organizations that serve good causes. Your donations are not limited to qualified 501(c)(3) charities.
Transfer On Death (TOD) Designation
The Transfer of Death (TOD) allows beneficiaries to receive assets at the time of death through probate. In TOD registration, named beneficiaries will not have access to your assets as long as your are alive.
State Intestate Succession Laws
State intestate succession, also known as “intestate succession,” occurs when the deceased has failed to the leave behind a valid will. In most intestacy laws, spouses and children are the first beneficiaries. If you do not have any spouses or children, assets will be passed on to parents, siblings, nieces, and nephews. If these cannot be identified, then the state looks to grandparents, uncles, aunts, or cousins. When there are no blood relatives that can be found, then the states take control of the assets.
Planning Your Estate
If you do not have any heirs, you will still need designate an individual who will help you make decisions. In the event that you are incapacitated, you will want a trusted individual to help you make critical decisions. Here are a few things you should have:
- A Durable Power Of Attorney (For Finances) – This individual is an authorized person who is selected to handle your financial and legal affairs.
- A Durable Power of Attorney (For Healthcare) – You can get a power of attorney to make medical decisions on your behalf.
- Living Will – This type of will details any medical interventions that you would or would not want to receive to keep you alive.
- Estate Administrator – When a responsible family member is not available, this individual will handle probate court proceedings, distribute assets, and manage the sale of your property.
What is a living will? A living will is a document that states how you want the end of your life to occur. A living will allows you to tell the doctors that if you are in a coma, if you have a terminal condition or an in-stage condition, stop.
The Probate Process
After death, the state court appoints a personal representative to manage your estate. This individual is known as an “executor” or “administrator”. They inventory the estates assets and ascertains. Probate is used when the deceased does not leave behind a trust. Debts and taxes are paid off with funds from the estate during probate. When a will is admitted to probate and the will is put into effect, only then can gifts be made to beneficiaries and the will executed.
Typically, probate is a straightforward process. However, even if you do not have any heirs, you may have family members who want to dispute the validity of your will. There are a few instances that lead to probate dispute is needed:
- When the decedent had a second (or third) marriage
- When non-family members or distant family members influence a will
- An executor is taking a long time or makes errors
Estate Planning With No Heirs – Why It’s Necessary
Even in death, you can still have “control from the grave” when you carefully plan. With or without heirs, you should consider what is at stake when it comes to your assets. The last thing you want is for the state to seize your assets. If you do not know where to start, the first step to take is to speak to an attorney who handles estate planning.
Orlando Estate Planning Attorney Aubrey Harry Ducker Jr.
We understand how simple estate planning mistakes or omissions can quickly turn into a disaster, resulting in litigation or probate. We aim to help our clients avoid common estate planning errors, thus protecting their assets, and effecting the efficient transfer of assets to the intended beneficiaries.
If you are dealing with any type of family law case, contact Attorney Aubrey Harry Ducker Jr. to discuss how our attorneys can help you with your Trust Administration & Litigation, Probate Administration & Litigation, and Collaborative Divorce case. Call us at (407) 647-7887 or send us a message. You can also visit the offices of Attorney Aubrey Ducker Jr. Aubrey Ducker Jr. serves Orlando and surrounding areas.