The growing trend of Americans choosing to remain childless is causing a significant shift in estate planning. As the number of childless adults rises, the traditional approach to wealth and estate management is being challenged. In 2018, approximately 15.2 million adults aged 55 and older, or 16.5% of the population, were childless, according to a U.S. Census Bureau report. This number has continued to grow, with a 2023 survey revealing that 47% of adults under 50 are unlikely to have children. This demographic shift raises critical questions about the future care and wishes of these individuals.
The absence of a next generation to take care of their assets and fulfill their dying wishes presents a complex challenge. Estate planning attorney Kelsey Simasko highlights the difficulty of this task, stating that it is one of the biggest issues in her field. Jay Zigmont, CEO of Childfree Trust, emphasizes that traditional planning often assumes the presence of a next of kin, which is not the case for many childless Americans. Only 19.9% of childfree adults have a will, compared to 32% of the general population, indicating a significant gap in estate planning.
The consequences of inadequate planning are severe. Without a medical and financial power of attorney (POA), personal health and financial decisions may be left to strangers or the court, potentially leading to unwanted outcomes or abuse. Estates without clear directives can result in lengthy and costly probate court proceedings, consuming up to 10% of the estate's value. Childless couples, in particular, are among the top wealth accumulators, with a median net worth of $398,960 and an average of $1,867,480, according to Federal Reserve data.
Childless Americans also have a significant number of pets, with 76.9% owning pets, according to Childfree Trust's survey. This highlights the need for pet guardianship and care provisions in their estate plans. To address these challenges, childless Americans should first consider finding trusted friends or relatives to serve as POA, executor, and trustee. However, in cases where no suitable individuals are available, professionals such as attorneys, financial advisers, or trust banks can be engaged to fulfill these roles.
Childfree Trust, for instance, offers a unique service by partnering with a trust company to provide medical and financial power of attorney and the ability to act as executor and trustee for childless individuals and couples. Companies like Plante Moran and Northern Trust also provide trust services, allowing clients to name them as trustees and executors to handle financial affairs according to legal directives. Childless Americans should also focus on financial planning, including saving for retirement, long-term care, and burial insurance, as they may not have the same inheritance or generational wealth concerns as those with children.
