Q: I have no family and wonder how I can plan for what will happen when I pass away. How can I arrange my affairs and who will manage my estate if I have no family?
A: Adults over the age of 50 who do not have children or close family are sometimes called solo agers or elder orphans. Many have concerns and worries as they age about who will be there to care for them or manage their affairs when they are unable to manage on their own.
However, despite these worries, surveys show that only about one-third of solo agers say they have someone who could help manage their household or finances if they were no longer able to do so themselves. Additionally, many have not documented their end of life wishes or designated who should make medical decisions for them if they are unable. Only about half of solo agers have an advance healthcare directive in place or have created a will or living trust. Only a third have made arrangements for their own funeral or burial.
While everyone should have documents in place for end of life and estate planning, this is especially important for solo agers because the law has few, if any, satisfactory “default” protections in place for them. If you have no will or trust in place when you die, and no living spouse or children, the court will allow your next closest relative (as determined by statute) to administer and receive your assets. That closest relative might be a distant cousin you dislike or have never met, and who will now inherit your money. If no relative can be identified, then the county public administrator will step in to manage your estate and – although rare – your assets could go to the state.
With a will or trust, a solo ager is free to identify any relative or friend who they would like to be their beneficiary, or they might identify a favorite non-profit to receive part or all of their estate. This can be a beautiful legacy to leave behind.
Good planning includes preparing for what happens if you become incapacitated as well as what will be done after you pass away. It may be difficult to think through these scenarios, but hopefully with good planning will come a feeling of confidence and relief knowing that a plan you approve of has been put in place.
When thinking about what happens if you are unable to make decisions for yourself, you should consider both medical and financial decisions that may need to be made. Meeting with a good estate planning attorney is especially important. The most basic documents every adult should consider having are an Advance Healthcare Directive and a Durable Power of Attorney.
If you own property and elect to make a living trust, you will need to name a “trustee,” a person who will step in and manage the financial aspects of your estate when needed, whether during a period of incapacity or after you pass away. If you have only a will, your executor will be unable to act until the court gives authority to do so after your death, so the agent you appoint under your Durable Power of Attorney will manage your assets if you are incapacitated until your death.
If you are short on trusted family members and friends, or simply do not wish to burden those you love with the duties of managing your affairs, you might consider naming a private professional fiduciary instead. Most fiduciaries will agree to be nominated in this manner. They will have a conversation with you, answer questions, and some even offer to meet annually to make sure they have the latest information about your life, health, etc. Private professional fiduciaries meet an important need for solo agers and others, serving those who have few or no good options they can name to make decisions when they are unable.
Whether your trustee (or executor if there is only a will) is a family member or a professional fiduciary, he or she will have authority to clear out and sell your home, and to otherwise gather and distribute assets, according to the plan you put in place. But they need the authority to do this, which only comes from a well-prepared estate plan.
While considering your plan think through your own main responsibilities. Whoever will be taking over your finances needs to be provided a list of your assets and creditors, account numbers, and passwords if you manage your finances online. If you have any pets, you should also plan for who will care for them when you are no longer able.
Seek out a professional to walk you through these important plans. Having your affairs in order will help bring you peace of mind so that hopefully you can live in the present, unincumbered by worries of the future.
Martha Shapiro can be reached at Senior Concerns at 805-497-0189 or by email at firstname.lastname@example.org.