Estate planning can be hard if you don’t have children, close family members, or friends to help—but it’s not impossible.
Estate planning can be hard if you don’t have children, close family members, or friends to name as your Trustee, Executor or Agent under a Durable Power of Attorney for Finance or Health Care. I’ve worked with many clients who struggle with how to put a plan in place when they don’t know who to ask to serve in these capacities. Often, this is the reason that they’ve put off making a plan.
The truth is that single people need to have a plan in place even more than anyone else.
Without the proper documents in place, if a single person gets sick, no one will be able to pay their bills or make medical decisions for them without a court-ordered conservatorship. Without a Will or a living trust, when a person dies, the state’s rules determine who inherits their assets—which go to distant family members—often not what a person wants.
If you don’t have children or close family members or friends to ask to help you, and you’re not a person with tens of millions of dollars, you have three options, to my mind:
You can work with a professional licensed fiduciary, if your state licenses them, or a professional fiduciary if they don’t.
You can work with a bank that offers trust services.
You can work with a large financial services company that offers trust services.
Professional fiduciaries are individuals, often accountants, certified care managers, or lawyers, that serve as fiduciaries, which is a person who assumes the responsibility for the affairs of another person and will act in that person’s best interest. Two states, Arizona and California, have laws that require such professional fiduciaries to register with the state and be licensed to practice.
In California, the Professional Fiduciaries Bureau is under the California Department of Consumer Affairs. The Professional Fiduciary Association of California offers a directory of fiduciaries licensed to practice in the state.
In Arizona, licensing is offered through the Arizona Judicial Branch. The Arizona Fiduciaries Association offers a directory of fiduciaries licensed to practice in the state.
Many banks, though not all, offer trust services as well. If you already have an existing relationship with a bank, ask them if they offer such services. If they don’t, ask them for a referral to local banks that do.
Finally, some large finanical services company, like Charles Schwab, Vanguard, and Fidelity offer trust services as well. If you already have accounts with them, ask them about their trust services.
If you are looking for a professional to name in your estate plan, here are some questions to ask any of the trust service providers that I’ve described above:
Do they have a minimum size of an estate that they are willing to accept as a client?
What are their annual costs?
What services will they provide?
How much personal attention will they offer? Is there a specific trust officer assigned to each client?
Are they willing to serve as co-Trustee or co-Executor with a family member or friend?
Do they serve as an Agent under a Durable Power of Attorney for Health Care? (Many do not.)
If you are interviewing an individual fiduciary, ask them what will happen when they retire-many fiduciaries have younger people working for them, or a succession plan in place.
Is there specific language that they want to see in a living trust or Will? Big financial services companies often have pages of language that they want included, often language that will allow them to keep servicing your investments and make money off of doing so.
All of us need to have plans in place so that people can act for us if we are incapacitated, and to settle our estates and distribute our assets as we wish them to be distributed. It is harder for those without children, close friends or family, but there are professional services available to help.