Retiring Without Heirs: Four Options For Your Estate

WDC NEWS 6 STAFF March 8, 2025

7 4 minutes read

Retiring Without Heirs: Four Options For Your Estate

Pam Krueger isn’t amassing a small fortune to leave to heirs. However, she does have a beloved niece and nephew that she plans to bequeath something to.

But before Krueger decided what her niece and nephew will inherit, she made sure her retirement savings was fortified and her long-term care was covered. After all Krueger doesn’t have children who can take care of her when she’s older. She’s well aware she’ll have to self-fund her future healthcare costs.

Then there’s travel. Krueger made sure she had enough money to pursue her dreams of traveling the world. Unapologetically, Krueger put herself first instead of thinking about her legacy.

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“I want to be able to rent a place for two or three months in Italy and Greece every year. I want to travel and go to all those bucket list places,” says Krueger, founder and CEO of Boston-based Wealthramp, an SEC-registered fee-only adviser matching platform. “Why should I be ashamed to say I worked hard. I’m not planning my life around legacy.”

Krueger isn’t alone. Zach Ungerott, senior wealth advisor at Hightower Wealth Advisors, says he runs into many clients who don’t have children or individuals to leave their savings to and they are left wondering what they can and should do with their estates.

“It becomes a value discussion. Do they want to give money to a niece, cousin, or do they want a large amount of the estate to go to charities,” says Ungerott. Or do they want to leave nothing behind, spending down their entire nest egg.

Retiring without heirs: where to begin

Deciding which way to go can be difficult but Krueger says it should come from a place of strength.

In her vision of retirement, she is traveling the world, staying in nice hotels and enjoying high-end amenities. But she’s also not frivolous. Krueger has a plan in place and the money to cover any emergencies or future long-term care needs.

That’s particularly important given the high price tag for healthcare in retirement. A 65 year old can expect to spend $165,000 in healthcare and medical expenses, according to Fidelity Investments annual forecast. That doesn’t include any unforeseen emergencies or stints in a long-term care facility.

“If you don’t have heirs, it probably means you don’t have anyone to rely on for long-term care. What if you go into memory care? You have to figure out how you’re going to cover the what ifs,” she says. “Once long-term care is set up, you can use your money guilt free.”

Whether you want to leave your money to charities, loved ones or spend it, here’s a look at how you can make it happen.

1. Leave it to a loved one

Just because you don’t have children or siblings doesn’t mean you can’t leave your estate to someone you care about. A will and trust are two common ways to do leave assets to non-family members.

Your will should lay out how you want your assets distributed and to whom. You can update this whenever you want.

Creating a revocable living trust is another option. The trust holds the assets and you control how they are managed and distributed. The assets go to the beneficiary when you die.

For life insurance policies, bank accounts and retirement savings plans, name your friend or family member as a beneficiary directly with the financial institutions.

2. Donate it to charity

If you want to leave some or all your money to charity, options abound. There are donor advised funds (DAF), scholarships and grants, direct donations and a combination of all of the above.

Donor advised funds are tax-advantaged charitable accounts that you invest in and have a say in where the asset is donated. You can donate cash, stock, real estate, fine art and cryptocurrency and other assets with value. You get a tax deduction for funding a DAF.

“One thing we’ve seen work well is simply creating donor advised funds which you could fund after your death,” says Ungerott.

3. Give while you’re still living

You can give to an organization or charity while you are living and get a tax break transferring stocks, cash or other assets.

With cash donations to qualifying public charities you can deduct up to 60% of your Adjusted Gross Income (AGI). For donations of long-term appreciated assets, such as stocks, you can deduct up to 30% of AGI.

If you are 70-½ or older you can make tax-free charitable donations from your IRA thanks to Qualified Charitable Distributions (QCDs).

“I’ve seen individuals set up scholarships and grants for schools, people, or specific fields or causes,” says Ungerott.”You can set up a trust that will fund specific causes. You can set up legacy programs at institutions.”

4. Spend it

For some people, the idea of leaving any money behind is out of the question. They want to spend it until they’re gone, what’s known as the die with zero rule.

If that is appealing, Krueger says to make sure to check off all these boxes first: ample savings to cover expenses and emergencies, long-term care paid for and manageable debt. If you are going that route it may be a good idea to work with a financial adviser who can help you determine your withdrawal rate.

Whatever you do, don’t wait until it’s too late

Estate planning should be part of your retirement whether you have three children to give your assets to or none. While it may be hard to think about something that is decades away, planning for how your estate will be distributed while you are healthy and of sound mind is the best way to ensure your wishes are honored.

If you do nothing and something happens your assets could end up in probate. “If you want to support the Humane Society and it’s not listed in your document and it’s not listed as a beneficiary then it goes to the state courts to decide and usually that means it goes to next of kin,” says Ungerott.

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