Estate Planning for Empty Nesters

by Jenny Ling, Esq.

Are you in the process of sending your kids off to college, or helping your youngest find their first apartment away from home? Congratulations!  You are an empty nester.  Empty nesters typically feel a mixed bag of emotions, one of them being a sense of uncertainty of what comes next.  But there is also a sense of excitement at all the new opportunities you now have.

You are going through a major life change and your estate plan should change with you.  If you first created your estate plan when your children were young, you might be surprised at how outdated it is now.  The concerns for parents of young children usually revolve around naming a guardian for their children and ensuring that they have provided for their children’s needs, even if they aren’t around.  As an empty nester, your concerns have changed. 

If you created a trust when your children were young, it is a good idea to review it now that they are older.  Do the ages and stages that you wanted to give them money still make sense?  Are they more mature than you expected and so they can take a greater role in managing their trust than you had thought?  Or are you wanting to assist them in the management of their inheritance for longer than you’d planned, now that you’ve seen who they are growing in to? 

This is also the time to review your powers of attorney.  These are the people you have designated to make financial and healthcare decisions for your if you are ever unable.  Can your children now act for you?

Another big change in your life may be getting a second home, possibly out of state.  This can have a major effect on your estate plan.  If you own property out of state, without making a specific plan for it, your family may end up having to open a second probate, called ancillary probate, in that state as well as Washington, when you pass.  This will add lots of time and expense for your family, when they are already grieving. 

If becoming an empty nester includes welcoming grandchildren, you’ll want to make sure your estate plan takes them into account as well.  You won’t be worrying about naming guardians for them, but if you want to leave money to your grandchildren, that requires special planning.  Children under the age of 18 can’t hold property in their own name so if you leave money, including life insurance or retirement accounts, to them directly, the court will need to name a financial guardian for them, which is long and costly court process.  If you leave money directly to your children, with the plan that they will pass that money on to their own children, there is not guarantee that your grandchildren will get that money.  Your children can spend that money as they see fit, or it may be at risk in the case of divorce or creditor claims.

If your children are just becoming adults and leaving the house, while your 18-year-old may still be a child to you, remember that he or she is now legally an adult. You will no longer be able to make your child’s health care decisions on their behalf.  And as parents, you also cannot act on your child’s behalf in financial transactions.  It is essential that you have your young adult children sign financial and health care powers of attorney to allow you to act on their behalf if something happens to them.  For our clients who have completed an estate plan with our office, we offer these documents for your college age children at no charge.

As you update your estate plan to ensure it will work with your current stage of life, consider whether your children have a plan in place as well.  If you have grandchildren, if your children don’t make a comprehensive plan, you may end up in a court battle about who will become their guardian if something happens to their parents.  You can consider giving the gift of estate planning to your children so that they can have the peace of mind knowing that they have a plan in place and there is no question what their wishes are.  We can also work to ensure that your estate plan and the estate plan of your children work in concert to create a legacy for the future generations.

As an empty nester, this is the perfect time to review and update your estate plan.  Contact Us today to schedule your complimentary 15-minute phone consultation to ensure that your plan is growing with your life.

Jenny Ling is a partner at the Law Offices of Jenny Ling, PLLC.  She focuses her practices on estate planning, business succession planning, business and bankruptcy.