No Kids – No Problem

You may be married, or not. According to the Pew Research Center, marriage rates have been declining steadily over the last half-century. In 1960, 72% of adults age 18 or over were married. That rate was down to 50% by 2014. Only half of the adult population is now married.

By choice or by happenstance, you may have no children. Not only has the percentage of married adults declined, the percentage of adults having children has also declined. According to data from the Urban Institute, after about three decades of steady birth rates, beginning in 2007, birth rates among women in their twenties declined 15% by 2012. This is reflective of a longer-term trend identified by research from the Pew Research Center which indicates the number of U.S. women who never have children has doubled since 1970.

If you have adult children, it is not uncommon to name them either initially or after your spouse, to make financial and health care decisions for you when you cannot. However, when there are no kids involved, what are the issues that may you may encounter?

Who do you want making financial and health care decisions for you when you are unable? To whom do you want to leave your stuff after you are gone? Have you done any estate planning?

Estate planning is more than just death planning. Estate planning is keeping control of your property and other assets while you are alive and well, providing for you and your loved ones in the event you became mentally disabled, and after you are gone, giving what you have, to whom you want, when you want, the way you want.

If you are married, you may think that your spouse has some sort of legal authority to make decisions for you if you are unable. But such is not the case. Marriage grants your spouse no such inherent authority.

Neither your spouse, nor anyone else, can make such decisions for you, unless he or she has been granted such authority by you, or by the probate court. You can grant such authority to your spouse and/or others through financial and health care powers of attorney. These documents would allow your designated agent to make financial and health care decisions for you if you are unable.

When you have no financial power of attorney, someone would have to be appointed as your conservator by the probate court, before he or she could make your financial decisions when you are unable. Similarly, with no health care power of attorney, someone would have to be appointed your guardian by the probate court, before he or she could make medical or mental health care decisions for you.

If you are married, oftentimes you name your spouse as your financial and health care agent. If you have no kids, who do you name as backups to your spouse? If you are not married and have no kids, who do you name?

If your parents are still alive and well, you may want to name them. After that, you may want to name siblings, if you have any and they are alive and well. After siblings, you may want to follow the family tree, nieces and nephews, great-nieces and great-nephews and so on.

If you have run out of relatives or do not want the relatives making these decisions, you may want to name a trusted friend or close neighbor. In our office over the last several decades, we have seen an increasing number our clients choosing close friends over distant relatives.

After you have run through relatives and friends, you may want to think about trusted family advisors, such as your CPA, tax preparer, financial advisor or pastor. You may have a long-standing relationship with them, and trust them to make these decisions. The person you name does not necessarily have to live near you. He or she could live in another city or another state and still make decisions for you.

Your bank may offer trust services and would act as your financial agent in the event of your mental disability or after your death. Your financial advisor or life insurance agent may be associated with an affiliated bank or trust company that could be named as your financial agent. These captive banks and trust companies typically handle financial matters for their affiliated company’s brokerage customers and policyholders.

When you are gone and have done no planning, your estate will go through the lengthy and expensive probate court process. Since you have no kids, all of your property and other assets would first go to your surviving spouse, if you have one. If you are not currently married, your parents would be first in line
In the event that your parents are no longer alive, all your stuff would be divided among your living siblings and the descendants of any of your deceased siblings. If none, then to grandparents and then to descendants of your grandparents. If there are no heirs to be found, then everything would go to the State of Michigan.

And if you have any heirs who are minors, their share of your estate would be held in a court appointed conservatorship until they reach age 18, when they become adults and gain all the wisdom and insight of adulthood and can handle large sums of money. At age 18, the court distributes all their conservatorship assets to them. They then go to college, the University of Corvette.

What is important to you? You may not want your stuff to go to your brother whom you haven’t seen in 15 years. Do you want to benefit that lazy nephew or the druggy niece? Or you may have a favorite friend or relative who has been particularly attentive towards you, whom you want to remember.

If you have decided upon individual beneficiaries, then how do you want them to receive their inheritance from you? If you left it to them outright, it would be subject to claims by their creditors and/or divorcing spouses. If however, you left the inheritances to them in separate lifetime trusts, the inheritances would available to the beneficiaries, but protected from claims by others.

Is higher education important to you? If so, you could do what some of my clients with no children have done, set up educational trusts for nieces and nephews or private scholarship funds at your favorite college or university or your local community foundation for certain classes of persons to be used for post-high school education.

And if there are no specific individuals whom you want to benefit, then what are your passions? What charities have you been supporting during your lifetime? Unless you remember them in your will or trust, they will not have the benefit of your support after you are gone. Do you want to continue to support your church? How about protecting animals or the environment? Do you want to help support substance abuse programs or cancer research? I have had clients over the years who have done all of these, and many more.

With proper planning, you can not only protect yourself during your lifetime, you can leave a legacy that will have a lasting impact long after you are gone.

Matthew M. Wallace is an attorney and CPA with the Wallace Law Firm, PC in Port Huron and can be reached at 810-985-4320, or

The ideas presented herein are for discussion and educational purposes only and not intended to be relied upon. For specific information regarding your needs, concerns and plan, you must consult with your tax advisor, financial planner and estate planning attorney to discuss your situation and obtain advice. © 2009-2016 Matthew M. Wallace, CPA, JD

Published edited July 3, 2016 in The Times Herald newspaper, Port Huron, Michigan as: No kids, no problem

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