How to plan for the end of your life if you don't have kids or a spouse

By Richard Eisenberg

Here are the vital estate-planning moves solo agers and people without children need to take

Solo agers and older adults without children are much less likely to have end-of-life and estate-planning documents in place than their peers overall.

When she was 39, Jaime Stathis took care of her grandmother, who had dementia, and thought to herself: I don't have anyone to take care of me.

Stathis, who is single with no children, hadn't drafted a financial power of attorney or a medical directive appointing someone to make decisions for her if she became incapacitated. The freelance writer and massage therapist is now 51 and still hasn't done those things.

"I think about this all the time with my mom, trying to get clear on all the paperwork, and she has said, 'Well, where's your paperwork?' And I'm like, 'Oh my god, you're right,'" Stathis said. Although she has printed out a medical-directive form, she hasn't filled it out yet. "I think it's avoidance more than anything else," she said.

Stathis, who lives Brattleboro, Vt., is part of the enormous U.S. population of solo agers. They're typically described as older single people without children, and their ranks are growing because people are living longer, often without spouses or partners. Estate planning for solo agers is crucial, because they generally don't have family members who are ready to step in to help make medical or financial decisions for them as they get older, if necessary, or to manage their estates after they die. Even some people who have children find themselves in this predicament.

"A child who is struggling with addiction or who has money problems may not be the person you want to designate to manage your affairs," said Lori Trawinski, AARP's senior director of finance and employment.

Including those solo agers who have children who can't or won't take on tasks such as having power of attorney or serving as executor of an estate, the share of people over 50 who are solo agers comes to 34%, according to AARP.

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What many solo agers don't do

Solo agers and older adults who are in a relationship but don't have kids are much less likely than other people their age to have power-of-attorney documents, medical directives, living wills and wills or trusts.

For example, just 37% of solo agers 50 and older have a medical durable power of attorney or advance directive, according to the Society of Actuaries. But 46% of all people in that age group do, according to a University of Michigan survey. "The truth is, we're going to have times in our life that we're unable to do something and we're going to need help," said Craig Parker, assistant general counsel for Trust & Will, an online estate-planning company.

Just 40% of solo agers 50 and older have a will or trust, according to AARP, compared with 53% of all Americans that age. Only 20% of adults of all ages with no children have a will, according to the Childfree Trust financial service.

Many financial advisers and estate attorneys are failing to help solo agers take these vital estate- and financial-planning steps, said Allen Davis, a financial planner and co-author of "Financial Planning for Solo Agers."

"In TV ads for financial planning, almost all the represented potential customers are not solos. They're people facing life as couples with children. The industry has also understood financial protection as protecting a spouse with income replacement if the other spouse dies," Davis said. "Solos face a whole other system of choices. They can't depend on families, so they need an aging plan."

For solo agers and those without children, estate-planning essentials are all about the "what" and the "who."

The documents you need to have

There are four important estate-planning documents to complete. You can find details about them in "Getting Your Legal Documents and Support in Order," an online guide from the SOA Research Institute and the Women's Institute for a Secure Retirement.

1. Durable financial power of attorney. This lets you designate someone to handle your legal and financial affairs should you be unable to do so.

2. Healthcare power of attorney. This document designates someone to handle medical issues on your behalf, giving them the ability to communicate with your doctors. Without this, doctors will make these decisions.

"I'll sometimes get a call from someone saying, 'Dad's in the ICU. They tell me I need a power of attorney now!'" Parker at Trust & Will said. That's when he must explain that if the father isn't conscious, it's not possible to get him to sign a medical power of attorney giving the child authority to make medical decisions for him.

3. Living will. This type of advance healthcare directive outlines the end-of-life decisions and medical treatments you want carried out if you become terminally ill or permanently unconscious with no hope of recovery.

4. Will or trust. A will lays out instructions for how your property will be distributed after you die, who will inherit your estate, the names of your beneficiaries and how much they'll receive. A trust, often used to avoid probate and delays settling the estate, is for more complicated estates.

"Many solos don't have a simple will," Davis said. "There's no sense of urgency to make sure their spouse or significant other is well taken care of." Without a will, their possessions may end up somewhere they wouldn't want, because courts will ultimately make the decisions.

You can hire an estate attorney or professional fiduciary to help draft these documents. Lawyers typically charge $500 to $1,200 for a simple will and advance directives, up to thousands of dollars to set up a trust. Fiduciaries often charge $175 to $300 an hour, or 1% to 2% of the amount of your assets.

Childfree Wealth, a financial-planning firm founded by Jay Zigmont, the author of "The Childfree Guide to Life and Money," recently launched the Childfree Trust service. For $999 a year, it creates the key estate-planning documents and care plans for people without kids, acts as the fiduciary for their financial and medical power of attorney forms, serves as their estate executor and provides a 24/7 emergency-response service.

Zigmont and his wife, who don't have children, were the trust's first clients. They were looking for the answer to a nagging question: "If my wife and I are in a car crash, who makes our medical decisions, who makes our financial decisions and who lets our dog out?" he said.

Online services provide do-it-yourself forms for solo agers and people without children. Freewill offers them at no charge. Trust&Will charges $199 for the combination of a will, power of attorney and living will, or $499 for a trust, power of attorney and living will. It also has attorney support for an extra $299.

"If you haven't taken the time to get these documents in place, it's unlikely that your wishes will be followed," AARP's Trawinski said.

Who to appoint

The trickier part, for solo agers and people without children, is deciding who should hold financial and medical power of attorney for you and who to appoint as the executor of your trust.

At Davis's financial-planning firm, where 25% of clients are solo agers, "we often learn that one of the obstacles [to appointing people] is a sense of bafflement about who they would name in these important roles."

Some solo agers are shy about tapping people they know. "You don't want to feel like you're asking someone to do something that might be a burden to them," Stathis said.

Trawinski noted the difficulties in finding the right person. "If you don't have a family member who can do these things, it may create additional hurdles, because you would need to ensure the person you choose is trustworthy and will follow through on your wishes."

Experts say you don't need to appoint the same person to hold both medical power of attorney and financial power of attorney and to be your estate executor, although you can. It's a good idea to choose a primary person as well as a backup in case that person isn't available when needed.

"Even if you can't think of the perfect person, pick two or three," Parker said.

Be sure, however, to get commitments from people before writing their names on your estate-planning documents.

"I hear from people all the time that they get a call from the hospital saying, 'You're on this person's advance directive,' and they say, 'What?" said Sara Zeff Geber, a solo ager and author of "Essential Retirement Planning for Solo Agers."

But when Sandi Kane, 74, of Campbell, Calif., asked a friend to hold her medical power of attorney, the answer was: "Oh, I'd be honored."

Geber offers this advice for deciding who to appoint: "Start exploring professional fiduciaries and extended family members. Look at the children of your friends," she said. "It's shocking to me how many people consider themselves a solo ager and say, 'I just can't do an estate plan. I don't know who to name.'"

Geber is naming a professional fiduciary as her primary designee and a younger cousin and younger nephew as backups. "I tell people to look for someone at least 15 years younger than you," she said. That helps ensure the people you may need will be available when the time comes.

Mary Young, research director at Davis Financial Group and co-author of "Financial Planning for Solo Agers," is taking a similar hybrid approach: using her brother as primary appointee and an elder-care adviser as a backup.

From time to time, double-check that whoever you chose is still the right person.

"As childfree people, solo agers move all the time," Zigmont said. A relocation may require you to replace people you've appointed with others nearer your new home.

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