Dear Penny: Am I Wrong if I Don’t Leave My Family an Inheritance?

A woman wears a black dress, pears and a fur coat. She's also holding a small dog.
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Dear Penny,

I am a single 40-something woman, and my mother recently passed in October. I have an older brother and sister, and they are both married with kids. The three of us will be splitting the inheritance equally. 

I'm more aware than ever that I will have to make a will myself now. My siblings insist that I should be leaving my estate to their children, and I was rather taken aback. Should I be obligated to leave my money to my nieces and nephews because I chose not to get married or have children? Any advice?

-Where Should I Leave My Money?

Dear Where,

Your brother and sister have some real nerve. You’re not obligated to leave your nieces and nephews a penny if you don’t want to. The entitlement some people feel surrounding inheritances will never cease to astonish me.

You get to decide what happens to your money and property when you die. Often the people we hold dearest aren’t blood relatives. If you died tomorrow, where would you want your money to go? To a close friend or significant other? A favorite charity? Your alma mater? Your pets? (Animals can’t actually inherit money, but many people set up a pet trust to ensure their furry pal’s ongoing care.)

But without a will, your state’s intestacy laws will determine who gets your property. If your parents are both deceased, your siblings would probably get your money and belongings. If you outlive your siblings, a court would distribute your estate to whomever it determines is your next of kin. That very well may be your nieces and nephews. So please don’t delay making a will, even though you’re relatively young.

While it’s important to have an estate plan for when you die, let’s talk about your estate plan for while you’re still alive. Specifically, who would you want making decisions for you if you became incapacitated?

Estate planning looks a lot different for single, childless people like you and me than it does for our married counterparts. We don’t have dependents who would suffer financially if we died suddenly. But when you’re married, your spouse is often the default decision maker if you’re unable to make important medical and financial choices.

For any single person, it’s essential to appoint someone you trust to make those decisions. Otherwise, a court will appoint someone to act on your behalf.

You need a financial power of attorney document that states who should manage your money and pay your bills in the event you’re unable. A medical power of attorney document is also necessary to specify who you want to make healthcare decisions on your behalf if necessary.

If possible, you should work with an experienced attorney to create a full estate plan. Some websites also allow you to draft basic estate planning documents, often for $100 or less. A DIY estate plan isn’t as airtight as one that’s crafted by an attorney, though it’s certainly better than nothing. If you think there’s any possibility your family would contest your will, it’s definitely worth it to shell out money for an attorney.

There are a few easy estate-planning moves you can make in just a few minutes. Make sure the beneficiaries of any retirement accounts or life insurance policies are up to date. These assets usually avoid probate and go directly to the person listed as the beneficiary. You can also list a payable on death designation for your bank accounts so they can bypass probate and go directly to the beneficiary as well.

As a single person, you’ll want to revisit your estate plan on a schedule — say, every two or three years. Often, people revisit their wills and beneficiary designations after events like a marriage or divorce, or the birth or adoption of a child.

But don’t let your brother and sister pressure you into leaving your nieces and nephews anything. In fact, I don’t think you need to discuss this matter any further with them if you don’t want to.

This is about you and your legacy. If your siblings want their kids to receive an inheritance someday, they should specify that in their own wills.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].