If you are reading this, you may be asking yourself, what should I do with my assets if who should inherit them isn’t clear? One of the most important aspects of estate planning is assessing how to divide your assets. However, what if you don’t have a spouse, children, or other heirs that would become obvious beneficiaries?
You need a plan
While this situation can be tough, it’s still crucial that you have an estate plan that outlines what you want to do with your assets. As an estate planning attorney explains, if you die without a will or immediate heirs, your money is still at risk for being given to someone you would rather not have it.
The Hierarchy of Inheritance
The rules and process for inheritance hierarchy usually goes by: surviving spouse, children, then grandchildren. But if none of these relatives are around or identifiable, your assets may go to parents, grandparents, nephew’s, nieces, siblings, or even the state itself.
If you die without a will or next of kin, then essentially your assets become escheated. This is just a fancy word for describing the state laying claim to your estate. So unless you want to risk the state getting all your stuff, it’s better to pick an individual or a charity organization yourself.
Consider Alternative Heirs
While most people think of beneficiaries or heirs as people, they don’t have to be. If you don’t have anyone with whom you want to inherit your assets, or you are the last in your line of the family, consider alternative heirs that can make a positive impact for the future of others. If philanthropy is something that appeals to you, you do have several options, including a charitable remainder trust, a donor-advised fund, or a private foundation.
Estate planning without heirs – Charitable Remainder Trust
In a charitable remainder trust, a donor receives a charitable deduction with a basis of the value of the property or cash transferable to an irrevocable trust. Also, the donor receives income from the trust for several years or a lifetime, and the chosen charity gets the remaining assets when the donor passes.
Estate planning without heirs – Donor-advised Fund
With a donor-advised fund, the donor contributes a tax-deductible and irrevocable contribution of cash, appreciated non-cash assets, or securities. The donor can invest funds for future growth and recommend grants to 501 (c)(3) charities that qualify.
Estate planning without heirs – Private Foundation
Lastly, a private foundation is a form of a charitable organization that is usually founded by an individual or family with tax-deductible gifts and is overseen by trustees or a board of directors, who may be paid for their management of the assets. There is no grant limitation to 501 (c)(3) charities that qualify.
Get legal help now!
If you aren’t sure how to distribute your assets or want help ensuring that your assets go to certain charities or other parties, then consider speaking with a legal team for assistance. Call the knowledgeable team of Silverman Law Office, PLLC.
Establishing an estate plan, whether you have obvious and immediate heirs or not, can still make a difference in the future to come.