Most estate planning conversations start with who gets what. For childfree adults, a harder question comes first: who makes decisions for you when you can’t make them yourself? In Part 2 of her conversation with Scott Barnes, CFP®, CLTC, Director of Financial Planning at Childfree Wealth, host Kirsten Howe moves from financial planning to the documents themselves — and to the people named inside them.
Scott and Kirsten dive in where many childfree clients start: pets, and why a line in a will leaving an animal and $10,000 to a friend doesn’t do what people assume it does. From there, they get into the fiduciary gap — siblings who are the same age as you are, nieces and nephews who may also be beneficiaries, and the reality that naming someone isn’t the same as that person being able and willing to do the work. Scott also walks through Childfree Trust, the sister company to Childfree Wealth, which provides medical power of attorney services in all 50 states and D.C., and the care documents that tell a fiduciary which hospital you’d prefer, who your veterinarian is, and who walks the dog.
Time-stamped Show Notes:
0:00 Introduction
0:40 Who Scott’s clients are: adults who, by choice or by circumstance, will not be having children — and why that changes the estate plan.
1:20 Pets first. Clients with children assume a son or daughter will take the animals; childfree clients have no built-in pet sitter.
2:05 Scott: for a lot of childfree clients, the pets are the reason they do their estate planning at all.
2:50 Why leaving a pet and $10,000 to a friend in a will doesn’t protect the animal — the money becomes that person’s outright.
3:35 Nothing in a will stops that person from keeping the money and surrendering the pet to a shelter.
4:15 Scott’s fix is a pet trust: a trust is about control, and control is what turns your intention into a guarantee.
5:00 Childfree clients often don’t have obvious beneficiaries either — listen in as Kirsten weighs in on who struggles most with that list.
5:45 The question Scott hears more often than “who inherits” is: who will make decisions for me when I can’t?
6:25 Why Scott pushes the medical and financial powers of attorney ahead of the will and the trust — incapacity is what actually happens to clients.
7:10 Childfree Trust, the sister company to Childfree Wealth, was built for people who have no one to name.
7:55 It operates in all 50 states and D.C., and it will serve as a client’s medical power of attorney.
8:40 Most trust companies handle everything else but decline the medical POA role.
9:20 The exceptions: California’s licensed professional fiduciaries, Arizona’s fiduciary program, and a similar option in Washington.
10:00 Trust companies often won’t take on the financial or legal power of attorney either.
10:40 Most people named in these roles don’t actually know what the job requires of them.
11:20 The niece or nephew you name as your agent may also be your beneficiary — two interests that can pull in different directions.
12:00 Unless someone files a complaint, there is no practical way to enforce an agent’s duty.
12:40 What a professional, objective fiduciary adds: your explicit written directions, followed.
13:20 Scott’s caveat — naming a child isn’t a guarantee either, because abuse of these powers happens in families too.
14:00 The blind spot in naming a sibling or a close friend: they’re your contemporaries.
14:40 They won’t be much help when you’re 85 in a hospital bed, and Kirsten’s suggestion to make a few young friends.
15:25 Naming someone isn’t enough. They have to be willing to step up and get to work.
16:05 Scott served as financial power of attorney for his parents and grandparents, and deliberately declined the medical role.
16:50 Have the conversation while you can, so the person you named knows your wishes before the emergency.
17:30 What Childfree Trust clients receive: a will, medical and financial powers of attorney, and a revocable living trust.
18:10 Care documents: resuscitation preferences, a preferred CCRC or assisted living community, and which hospital to be moved to.
18:55 The pet section of the care documents — veterinarian, boarding, dog walker, cat sitter.
19:35 If a client never fills them out, the trust company hires care managers in the client’s local community instead.
20:10 Why so many parents in their 70s and 80s keep their plans close to the vest, and what that costs the family in an emergency.
20:50 Knowing what the job involves makes it easier to accept, and why pre-planning a funeral is a gift to whoever survives you.
21:30 In the works, around the beginning of the year: the same service for people who do have adult children, including estranged ones.
22:10 Where to find Childfree Wealth, Childfree Trust, and Childfree Insights.
Get in touch with Scott!
Scott Barnes, CFP®, TPCP®, CLTC
Childfree Wealth
https://childfreewealth.com/
https://childfreetrust.com/
scott@childfreetrust.com
Transcript:
Hello, and welcome to Absolute Trust Talk. I’m Kirsten Howe, and this is our podcast here at Absolute Trust Counsel. I’m joined again in this episode by my colleague Scott Barnes with Childfree Wealth, who is a Certified Financial Planner professional.
In our last episode, we talked about some of the unique challenges and interesting aspects of financial planning with childfree clients. Scott is back with me for this episode, and we’re going to stay with childfree clients — that’s Scott’s focus — but concentrate more on the estate planning and estate administration side of it. That’s more my focus, though as you’re about to see, it’s very much his focus as well.
Scott, welcome back. I’m really glad to have you here again.
Thank you, Kirsten. Happy to be back.
As a reminder, Scott is a financial planner who works primarily with childfree clients — people who, either by choice or by circumstance, do not have children and will not be having children. That’s a different lifestyle, and it involves different financial planning. Now we’re going to focus on some of the challenges those clients face in estate planning.
Let’s start with the most fun one: pets. If you’re an older client with pets and you have children, you tend to assume your children know your pets and love your pets, and that if something happens to you, they’ll take your pets. Childfree clients don’t have that built-in pet sitter.That’s correct. We see it all the time. A lot of the motivation for estate planning among childfree people comes from their pets.
Because the pets are their kids.
The pets are their children, yes. It’s very common that we see that as the motivating factor for getting their estate planning documents done. It is important for childfree people — and for everybody, but especially for childfree people — to consider what will happen to their pets if something happens to them.
We advocate for pet trusts rather than just a line in a will saying my animal goes to this person and here’s $10,000 to handle their care. As I’m sure you’re aware, once that money goes to that person, they could simply take the money and drop the pet off at a shelter.
Obviously your intention when you do that planning is for the person not to do that. But there’s nothing really preventing it.
It’s tough.
If you want to guarantee it, that’s what I always say: a trust is about control. Control is what you get with a trust. That’s how you guarantee it.
Childfree clients often don’t have built-in beneficiaries either. In my practice, it’s my single women without children who have the hardest time settling on a list of beneficiaries.
For many childfree people, it is a challenge to determine who they’re going to leave their assets to when they ultimately pass. But the bigger question I see more often on the estate planning side is, who will make decisions for me when I can’t?
That is the biggest one. I completely agree with you. That’s the medical power of attorney, the health care proxy, the financial power of attorney — having all of those in place.
That’s probably the biggest challenge we see when I’m talking with childfree clients. For many of the clients we work with, yes, I want them to get a will done, and I’d love for them to have a trust in place. But I care more about the emergency and contingency planning, which is the medical and financial power of attorney.
The incapacity planning. I agree. We need to focus on that more than anything else, because that’s what’s really going to affect our clients. The death planning is for your kids and your nieces and nephews. For you, the focus is incapacity.
One of the reasons I wanted to have you on the show is that you’re doing something unique in that space, serving childfree clients who don’t have a friend or family member who could fill these fiduciary roles for them. Childfree Wealth has a sister company called Childfree Trust. Tell us a little about that.
Childfree Trust was created for exactly that situation — for people who don’t know who to name in those positions. We’re here to fill the role. We’re the only nationwide service, available in all 50 states and D.C., that will allow you to name a professional trust company as your medical power of attorney.
Most trust companies, as I’m sure you’re aware, will do nearly everything else but will not serve as your medical power of attorney. That’s generally not available across the United States. You’re fortunate to be in California, where professional fiduciaries can be hired. Arizona has a fiduciary program, and Washington has something similar. But across most of the country, that role isn’t widely available to the general population. You may be able to find an attorney here or there willing to do it, but it isn’t common.
I find that trust companies generally won’t take on a financial or legal power of attorney either. You might find some that will, and of course we have licensed professional fiduciaries here who do. As you pointed out, we’re unique in California in a lot of ways, and that’s one of the good ones.
It’s a great service for people who don’t have somebody they can rely on. That’s the key. Our childfree clients may have a sibling they’re willing to name, or a niece or nephew. But then it comes down to that word you used — fiduciary. Most people don’t understand what these roles actually are, what’s required of them, and what they should be doing.
You may be close to a sibling or close to a niece or nephew, but there’s always the possibility that they’re thinking more about what they’ll receive when you pass than about your care at that moment. If they’re making your medical and financial decisions, you want them acting in your best interest, and you hope they will. Unless somebody files a complaint, though, there’s really no way to enforce it.
Having a professional, objective fiduciary behind you who follows your explicit directions about what you want to happen if you’re incapacitated is huge. It can make a big difference. And again, I’m not saying children are the perfect people to fill that role either, because there’s plenty of abuse that occurs there too.
Absolutely.
At least there’s a better understanding and a greater likelihood that they won’t abuse their powers in that position. In theory, you know your children well if you’re choosing them. But if you don’t have children and you’re looking to your siblings, your siblings are your contemporaries. They may be a few years older or a few years younger. Chances are they aren’t going to be much help to you when you’re 85 years old in a hospital bed. That’s a problem. And friends too — most of us have friends who are our contemporaries.
Our friends are contemporaries, yes. I think a good goal for all of us is to make a few young friends. Not for that purpose, but for all the other benefits that come from it.
This is a very good service you’ve identified a need for, and your company has built a real program around it. It’s very needed. There are so many people who, even if they have children, don’t have someone reliable. It’s not just that the person has to act in your best interest. They have to actually be willing to step up and get to work.
It’s not easy. Someone like yourself has been through it, and I have as well. Filling those positions and making those decisions is hard. Asking someone to do it, especially someone who isn’t related to you, is a lot. I hate to call it a burden, but it’s a lot to ask.
It is. Family is one thing, but asking a friend to step into those roles is not easy.
For my parents and my grandparents, I was the financial power of attorney, because I understood all of that and was more than happy to handle it. I deferred on the medical side. I told my brother and sister they were going to handle that, because I didn’t want to make those decisions. I know what my parents wanted, and I didn’t want to put myself in a position where I might not be able to make that decision for them.
That’s something people don’t think about. They’ll just name a person and assume it’s handled. You need to have the conversation with anyone you name so they know your wishes and understand the expectations if something happens.
That’s absolutely true. Working with a professional like Childfree Trust, I’m sure there’s a process involved with a lot of communication about what you want and don’t want — in this scenario, this; in that scenario, no. Talk a little about that.
Clients who sign up for our Childfree Trust service get all of their basic estate planning documents. They get a will, a medical and financial power of attorney, and a revocable living trust. Along with that, we have what we call our care documents. We encourage clients to complete those after their main documents are done, and they tell us what they want to happen when the time comes.
That means decisions about resuscitation and all of that — which is in the basic documents as well, but here we get even more explicit. If there’s an assisted living facility or a continuing care retirement community they’d want to go to, it’s listed. If there’s a particular hospital they’d prefer, and they end up somewhere else, we’ll do our best to have them moved.
And the pets as well. We ask who your veterinarian is, who you board your animal with when you travel, who the dog walker is, who the cat sitter is. If something happens, we can start executing on that plan and make sure Kirsten’s dog gets let out or her cat is fed and watered and the litter box is handled.
All those fun things nobody really wants to do, but we do them lovingly for our Louises.
Exactly. That’s where the care documents come in. If a client doesn’t tell us what their preferences are, we’ll hire people in the local community to come in and do it. The professional trust company doesn’t actually show up at the door. They hire care managers and other people to fill those roles when the time comes.
Even for people who aren’t inclined to work with Childfree Trust, this is a really good message. Planning isn’t just the documents. There’s so much more to it, especially when we’re talking about incapacity — maybe exclusively when we’re talking about incapacity. You’re asking somebody, whether it’s Childfree Trust or a child or a nephew, to step in and help you live your life. They need to know what that looks like and what you want it to look like.
I see it all the time, and I know you do too. The parents and grandparents who are in their late 70s and 80s right now don’t communicate what they want. They tend to keep it very close to the vest and don’t even tell their kids what they have. For people in my position — I’m in my 50s — my parents ultimately told me all of it, but it wasn’t something that came naturally to them to disclose. That’s very common, and you usually don’t learn the situation until you’re thrown into an emergency. That’s very difficult for people to handle.
We encourage people to get their estate planning documents done, and to talk to the people who will step into those roles. It’s so important that those people know what you want. If you leave it to them, hopefully they’ll do the right thing, but if you have preferences, make sure they’re written down.
I haven’t had to do this for anyone yet, but I believe it’s less of a burden. It feels less stressful to take the job if you know what the job is and you’re being told exactly what the person wants. I see that with things like planning a funeral and a burial. If you can prepay, or at least pre-plan, what a blessing. What a gift.
It’s huge if you can do all of that ahead of time, because it makes life so much simpler for the people who end up having to deal with it. When there’s grief involved, it’s that much harder without it.
Absolutely.
We certainly recommend that everybody talk to the people who will be named in those roles. And if they don’t have somebody, that’s where a service like Childfree Trust can come in.
Just so you’re aware, Kirsten, we’re working on a solution for people who do have adult children. We’ve heard a common concern, especially from people with estranged children: I have an adult child, but I haven’t talked to that person in 20 years. We hear that a lot, and we’ve wanted to find an answer for it. Even for people whose children are still in their lives, we’re hoping to provide the service and open it up to more people. That will probably be available around the beginning of the year. It won’t be called Childfree Trust, obviously. We want to get this into as many hands as possible, because so many people just don’t know who to name, even when they do have children.
Very true. Scott, thank you so much. My guest today has been Scott Barnes with Childfree Wealth and Childfree Trust. Scott, before we go, tell us quickly how to find your company.
Go to our website, childfreewealth.com, for the financial planning side, and childfreetrust.com for Childfree Trust. We also have a site called Childfree Insights, where you can get to either one. Childfree Insights is where we host our podcasts and everything else of our own. We’d love to have people join us there, and if you have questions or you’re childfree, we’d love to have a conversation with you.
Thank you so much, Scott. This has been enlightening, educational, and a lot of fun.
Thank you, Kirsten.
And thank you all for watching and listening. We appreciate it. If you liked this, follow us, subscribe to the podcast, all the things. I look forward to connecting with you next time.
Resources Related to This Episode:
- A Will is Not Enough – Securing Your Legacy with Estate Planning Life can change in an instant. A will is not enough to be prepared. Get free access to our actionable E-book Guidebook #1 and start protecting your legacy today. https://absolutetrustcounsel.com/guidebooks/
- Learn how to comfortably define gray areas and assess your unique needs to build a secure future now effortlessly. Check out Guidebook #2, Estate Planning Beyond the Basics, here > https://absolutetrustcounsel.com/guidebooks/
- Get our free introductory guide to the most used estate planning tool, family trusts, and understand how we plan to help protect your family. Guidebook #3: https://absolutetrustcounsel.com/guidebooks/
- Absolute Trust Counsel would love to offer access to our Incapacity Planning resource page: https://AbsoluteTrustCounsel.com/Incapacity-Planning/. We’ve collected our top planning information all in one place so listeners can find videos, guidebooks, blog posts, and a host of information with tips and strategies on implementing, planning, and protecting themselves and their loved ones.
- We’re pleased to provide a library of e-books to address common estate planning questions and concerns in practical, easy-to-understand language. https://AbsoluteTrustCounsel.com/Resources/.
- ASK KIRSTEN: If you’d like Kirsten to answer your question on the air, please email her at Info@AbsoluteTrustCounsel.com.
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