What Should You Do With Your Estate If You Have No Spouse or Children?

In Massachusetts, the wisest estate planning takes place when a Cape Cod estate & trust administration attorney guides you through the process of creating the legal documents that will make your wishes and instructions regarding your estate unmistakably clear after your death.

Determining how your assets and your property will be divided and distributed when the time comes is the most essential part of estate planning for most people. But if you have no obvious heirs, what should you do with your estate? What are your options and alternatives?

People who have the right to inherit are known as “heirs,” but you may have no spouse, children, or other heirs. Estate planning attorneys often work with unmarried and childless clients who have no idea what they should do with the assets and property that will be left behind.

What Does “Dying Intestate” Mean?

In Massachusetts, if you do not leave behind a will or an estate plan – in other words, if you die “intestate” – your estate will go through the probate process and will then be divided and distributed under the terms of the state’s intestacy laws.

When someone dies intestate, the spouse is the first person legally eligible to inherit. However, there are many instances where a surviving spouse will receive less than the entire estate, as most married couples would want. In fact, in many situations, the surviving spouse will inherit a little more than 50% of the estate. The balance will go to other relatives, based upon who survives the decedent.

To make matters worse, children of the decedent may receive almost 50% of the estate and if any of the children are minors there are additional complications and expenses. If there are no children of the decedent the remainder goes to other relatives in the order specified by Massachusetts law.

If there is no living spouse, the children inherit, and if there are no living children, the grandchildren inherit. If the decedent never had a spouse or children, the parents may become heirs, and then siblings, nieces, nephews, and cousins, etc.

Additionally, if you die intestate, whoever your heirs may be, they may have to pay inheritance taxes that could have been avoided with the right estate plan. A well written estate plan usually includes a trust that can minimize the taxes your loved ones may have to pay.

What Can Happen if You Have No Heirs?

If you have no living relatives, no will, and no estate plan, you will not have any control or say about what will happen to your property and assets after you’ve passed away. A court may even designate someone that you don’t know to administer your estate.

If you leave no will or estate plan behind, and if you have no living relatives, your property will eventually go to the state, but this seldom actually happens. If you have no obvious heirs, the law transfers your property to any living relative who can be found.

What is Probate?

Probate is a court proceeding. As a court proceeding, what goes through probate is generally a matter of public record – meaning the decedent’s personal, financial matters can be seen by anyone who asks. In Massachusetts, a probate court proceeding cannot be closed until at least one year after the date of death has passed.

However, most probates typically last about a year and a half. Because probate is a court proceeding, most families need the assistance of at least one attorney (and in some cases each family member may need his or her own separate attorney), and consequently probate can end up being expensive, with the costs associated with probate totaling to be around 5% of the estate size.

In the probate process, the decedent’s assets and property, which are owned individually, are identified, evaluated and appraised, remaining debts and estate taxes are paid, and what remains is distributed according to the decedent’s will (if a will was left) or according to Massachusetts intestacy laws. Probate can and should be avoided.

It ties up assets and property, often for months. During the probate process the assets going through probate are generally not available for the heirs to use. It can greatly reduce the value of your estate. Creating a living trust with the help of a Massachusetts estate planning attorney, so that your assets and property are owned by the trust and no longer probatable, is one way to avoid probate.

If you don’t have a spouse or children, it is still better to create an estate plan and name an heir than to let a Massachusetts court divide and distribute your estate. Faced with the question of what to do with their estates, people without heirs often name a charity to inherit an estate.

If you choose charitable giving, that may create some options that your estate planning attorney will need to explain to you in detail. Rather than naming a charity as a direct heir of your estate, you may instead want to consider creating a private foundation or a charitable remainder trust.

How Do Private Foundations Work?

Private foundations offer grants to charities. Usually, private foundations are created with a tax-deductible donation. The foundation is managed by directors or trustees. These directors or trustees are usually paid, and they oversee the foundation’s assets and properties.

How Do Charitable Remainder Trusts Work?

If you choose to give through a charitable remainder trust, an estate planning attorney will help guide you through the process. The Trustee you have named will then be in control of the trust. Your attorney will:

Confirm that the organization you designate has IRS approval.
Move into the charitable remainder trust the assets you’re donating to the trust.
The Trustee will manage the trust during your lifetime, making distributions (typically to you and/or your spouse) of the specified amount for a fixed period of years or for the rest of the beneficiary’s lifetime.
Designate the charity as the remainder beneficiary, to receive whatever may be left in the trust at the end of the term of years or after the death of the income or annuity beneficiary.

Whether you name a charity or some other party as your heir, you should review the estate plan after no more than five years – or sooner if changes have happened in your life or in your relationship with the party you’ve named as your heir.

Whether or not you have a spouse or children, no one can know what tomorrow will bring, so start the estate planning process promptly. Good estate planning requires work, time, and care, but the proper estate plan will give you control of what is yours – even after you’ve passed away.

What Else Should Be Part of Your Estate Plan?

For those who have no spouse or other relatives, your estate plan also needs to designate someone to make decisions for you if you should become incapacitated. A Cape Cod estate planning lawyer will help you create one or more of these key legal documents:

A Health Care Proxy (sometimes called a durable power of attorney for healthcare in other states) authorizes someone to make healthcare decisions for you if you cannot make those decisions by yourself. In some states a medical power of attorney is not recognized. In those states a living will is used to specify which life-prolonging treatments you will and will not receive if you are unable to articulate those preferences. A good estate plan will include both a Health Care Proxy and Living Will, even though Living Wills are not yet recognized by statute in Massachusetts.
Similarly, a durable power of attorney for finances authorizes someone to handle your financial and legal affairs if you cannot manage those affairs by yourself.
Revocable Trusts are often a better way to handle management of assets upon an incapacity because most financial institutions are very comfortable with trusts. Trusts allow you to retain control of your financial affairs until you are no longer able to manage things by yourself but may also be designed to allow you to continue to have a say in the management of your own financial affairs, even after you start to experience incapacity issues by using a co-trustee. Additionally, revocable trusts may help to keep your personal financial affairs private.

Take Control – With the Right Attorney’s Help

Probate and inheritance laws are difficult and often confusing. Nevertheless, the right Cape Cod estate planning attorney can provide reliable, sound guidance that lowers estate taxes, makes sure your instructions are honored when the time comes, and fully complies with Massachusetts law.

The estate planning process gives you control you otherwise do not have. The right Massachusetts estate planning lawyer can make that process easier. And once again – it can’t be stressed strongly enough – no one knows the future, so the time to plan your estate is now.