Estate Planning for Child-Free Couples: Who Will Inherit Your Assets?

Without the substantial financial obligations that come with raising children, child-free couples across California frequently accumulate substantial wealth and assets over their lifetimes. As a result, they often have large real estate holdings and massive retirement funds. As a result, the Kusner Legal team is frequently asked, “Who will inherit our assets if we do not have children?”

If you do not have a comprehensive estate plan, the state of California has already answered that question for you. Unfortunately, California law uses an old-fashioned one-size-fits-all mathematical formula to determine who gets your assets. This formula applies to everyone who dies without an estate plan, even if it goes against your personal wishes.

The first way to tell that this default plan probably isn’t a good idea for child-free couples is that it presupposes people want a significant share of their separate property to go to their children. As a result, if you want control over where your assets go, it is best to create a custom estate plan.

What Happens If a Member of a Child-Free Couple Dies Without a Plan?

California is one of the few states nationwide that operate under community property laws. As a result, if a couple is married, their property is divided into separate pots:

• Community property covers most assets and debts gained during marriage. The legal presumption is that if a single spouse earned a bonus at work or incurred a debt, both spouses are legally responsible for it.
• Separate property is property owned by only one spouse. This includes pre-marital assets, individual inheritances, gifts specifically given to only one spouse, etc.

If a member of a child-free couple dies, their property is then distributed per this chart:

How Can a California Child-Free Couple Avoid Probate and Intestacy?

California’s intestacy rules can leave your long-term romantic partner with nothing. Meanwhile, even if you have a will, the probate court process can be extraordinarily expensive and time-consuming, oftentimes taking well over a year and costing 5-7% of the estate’s gross assets. So, couples often consult with Kushner Legal’s Beverly Hills estate planning attorneys to avoid these problems.

Typically, we help child-free couples do this by creating a revocable living trust. A revocable living trust is a legal entity that can hold assets such as real estate and funds in its own name. However, you still have complete control over those assets and can transfer them in and out as you see fit. You can also designate a trusted person to administer the trust if you are unable to and leave them detailed instructions to follow. Those designations and instructions (i.e., who you want your beneficiaries to be) can also be changed anytime you want.

Furthermore, a revocable trust avoids the problems posed by probate. Your trust administrator can distribute assets immediately per your instructions. The trust agreement is also completely private, so there is no need to worry about a nosy distant relative finding out who you leave your assets to.

Minimizing Estate Taxes and Maximizing Charitable Giving

Another major consideration for child-free couples is the impact of state and federal taxes. Without children to inherit your wealth, you might have different priorities regarding tax minimization. High net worth individuals must be aware of the federal estate tax exemption limits. If your total estate exceeds the exemption limit, your assets could be subject to an incredibly steep federal tax rate before your beneficiaries receive anything.

For child-free couples, charitable giving is often a primary tool for both philanthropic goals and tax mitigation. Establishing specialized trust structures allows you to support a charity while simultaneously generating substantial income tax deductions. These advanced trust options can provide you or your partner with a steady income stream during your lifetimes, with the remainder ultimately going to the charity of your choice. This dual benefit makes charitable trusts a highly popular option for couples looking to reduce their taxable estate while leaving a profound positive impact on their community.

Frequently Asked Questions (FAQs) from California Child-Free Couples

Do unmarried child-free couples need separate trusts?

While married couples often utilize a joint trust, unmarried couples generally benefit from creating two separate individual living trusts. Separate trusts provide cleaner asset protection and make it much easier to handle individual property. If the relationship ever ends, separate trusts are vastly easier to manage and dissolve than a commingled joint trust.

How do I legally leave my assets to a charity?

You can designate a charity as a beneficiary within your living trust just as you would a human being. You can specify a flat dollar amount, a specific asset, or a percentage of your total estate to be given to the organization. For high-net-worth individuals, more complex structures like Charitable Remainder Trusts can also offer significant tax advantages while supporting your favorite causes.

Can I name a close friend as my executor or successor trustee?

Yes, you have the absolute right to name anyone you trust to serve as your executor or successor trustee. For child-free couples, this is often a close friend, a trusted colleague, or professional fiduciaries as West Hollywood estate planning attorneys. 

It is highly recommended to speak with the person beforehand to ensure they are willing to take on the responsibility. If you have a significant amount of assets, you should also ensure that they have the legal and financial skills to handle the estate and avoid the spoliation of assets. Additionally, you should always name at least one alternate backup in case your first choice is unavailable when the time comes.

Protect Your Legacy and Partner with Kushner Legal

Child-free couples have incredible flexibility when designing their legacy, but they also face unique legal vulnerabilities under California default statutory rules. Do not let state laws dictate what happens to your achievements.

At Kushner Legal, we understand that modern families come in many different forms. We have extensive experience helping child-free individuals create tailored, highly effective plans that protect their partners, support their friends, and preserve their financial legacy.

Contact Kushner Legal today to schedule a confidential consultation and take control of your future.