How Do I Create an Estate Plan with an Only Child?

Key considerations in estate planning with an only child

Stereotypes surrounding “only child syndrome” have largely been debunked, as recent studies show that only children, on average, develop social skills similar to those of children with siblings.^[1] Further, outdated perceptions surrounding only children have shifted as the average size of the American family has shrunk, and one-child families have become far more common. Still, there can be unique challenges for both the child and the parents, especially in terms of estate planning with an only child.

In some ways, having one child simplifies the process. However, leaving your entire estate to them and making them the sole decision-maker for all the roles in your estate plan may not be ideal. While the child’s age, personality, and lifestyle are major factors when estate planning with an only child, there are other considerations to keep in mind.

The Shrinking American Family

Large families used to be the norm in the United States. At the peak of the baby boom (1946–1964), the average American family had 3.7 children, compared to 1.9 currently.^[2]

Around one in five households today are one-child families,^[3] and census data show that one-child families are the fastest-growing family unit in the United States. From 1976 to 2015, the number of parents with one child doubled from 11 percent to 22 percent.^[4]

Key Considerations in Estate Planning with an Only Child

Generally, parents of only children are often in a better position to provide for them economically for multiple reasons. Higher educational attainment among parents is often associated with fewer children, and there is a strong correlation between education and income. Forgoing multiple children can also mean that parents have more resources available for raising their only child, which from birth to age 18 was estimated to cost more than $310,000 in 2022.^[5]

Increasingly, the costs of raising a child do not end at age 18. Today, approximately 45 percent of young adults (18 to 29 years old) live at home with their parents,^[6] and many remain financially dependent on their parents for support.^[7]

Findings from a recent Pew Research survey show that most parents and young adults rate their relationship with one another as very good or excellent.^[8] However, concerning estate planning, there appears to be a disconnect between the parents’ expectations and the child’s.

A 2024 study from Northwestern Mutual found that 32 percent of millennials and 38 percent of Gen Z expect to receive an inheritance—but only about 22 percent of Gen X and boomer parents plan to leave one.^[9] Although 35 percent of boomers said giving a financial gift to the next generation was very important, only 11 percent indicated it was their top financial goal.^[10]

Northwestern Mutual says that the study finds “a considerable gap exists between what Gen Z and millennials expect in the way of an inheritance and what their parents are actually planning to do.”^[11]

Among children expecting to receive an inheritance, half consider it “highly critical” or “critical” to their long-term financial security.^[12] That number is highest for millennials (59 percent), including 26 percent of millennials who said they will not be able to achieve long-term financial security without an inheritance.^[13]

With all this in mind, leaving everything to an only child in an estate plan is the most straightforward option for parents. However, there is no legal obligation to leave a child anything in your estate plan.

Even if your child no longer relies on you financially, parents can have good reasons for limiting a child’s inheritance or disinheriting them altogether. Whether you are estranged from your adult child, they do not need the money, or they are not responsible enough to handle an inheritance, your estate plan is your prerogative—and yours alone. Should you decide that somebody else—such as other family members, close friends, or a charity—is more needy or deserving, it is your right to leave your money and property to them instead of your child.

Of course, gifting to loved ones upon your passing is not an all-or-nothing proposition. You can split gifts among a child and other beneficiaries. If you have concerns about your child receiving a lump-sum inheritance, you can place money for them in a trust and name a trustee to manage the money for them, with distributions made at the trustee’s discretion or tied to incentives and milestones (e.g., holding a job, getting married, or starting a business).

Your Only Child’s Role in Your Estate Plan

Creating an estate plan involves naming key decision-makers who will act for you during your life (in other words, during a period of temporary or permanent incapacity) as well as after you are gone. You may be considering appointing your only child to some or all of these roles:

Personal representative/executor. This is the person named in a will (or appointed by the court if there is no will) to wind up your affairs after your death. Their responsibilities include inventorying, locating, and distributing your money and property, paying outstanding debts, filing a final tax return, submitting court documents, and communicating with beneficiaries or heirs.

Successor trustee. This is the person you name in your revocable living trust to manage the trust’s accounts and property for the benefit of the beneficiaries you name. A common estate planning strategy is to name yourself as the initial trustee of a trust that holds your money and property and provides instructions about distributing them during your life and when you pass away.
Agent under a power of attorney. Powers of attorney are legal documents that allow you to name other people (your agents) to handle your financial and medical affairs on your behalf when you are unable to do so. The individual you nominate as your agent or attorney-in-fact can be given broad, unilateral legal authority to make important health and money decisions for you when necessary.

Each of these roles comes with significant responsibility. Making your only child responsible for all of them might be too much for them to handle. When thinking about estate planning with an only child, ask yourself the following questions:

Does your child have the right skills and aptitudes for this role?
Do you trust them with your finances or to make your medical decisions the way you would like them to be made?
Can they make tough decisions, handle pressure, and uphold legal duties?
Do they have the right disposition to handle any disputes that might arise with creditors or beneficiaries?
Do they have a busy professional or personal life that might interfere with their obligations to you and your estate?

Just as you are under no obligation to leave everything (or anything) to your only child, you are not required to name them as a key decision-maker in your estate plan. As an alternative, you could choose a close friend, a family member, or a professional (e.g., a professional or corporate trustee) to fill these roles.

Your choice of executor, successor trustee, and attorney-in-fact should be based on the person’s ability to carry out the necessary duties competently—not on feelings of loyalty or obligation.

Dividing the powers among different individuals can also provide checks and balances that prevent a single individual from exercising too much control over you and what you own. Naming your only child to multiple roles may raise conflict-of-interest questions as well, especially if they are not the sole or primary beneficiary.

Balancing Head and Heart in Your Estate Plan

Parents are no strangers to weighing practical concerns for their children alongside the unconditional love they feel for them. Striking the right balance does not necessarily get easier as you age and your child becomes an adult. It might even become more complicated as you sit down to design an estate plan and make the important decisions in creating a comprehensive plan.

For advice about estate planning with an only child that considers that is best for everyone—you, your child, friends, family, and others you care about—while accomplishing your specific goals, contact Andre O. McDonald, a knowledgeable Howard County, Montgomery County and District of Columbia estate planning, special-needs planning and Medicaid planning attorney at (443) 741-1088; (301) 941-7809 or (202) 640-2133 to schedule a consultation.

DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL, INSURANCE OR TAX ADVICE.

^[1] Zara Abrams, Only children are often misunderstood. Take a closer look at the science. 55 Monitor on Psychology 6 (Sept. 1, 2024), https://www.apa.org/monitor/2024/09/only-children.

^[2] The Only-Child Family, Psychology Today, https://www.psychologytoday.com/us/basics/family-dynamics/only-child-family (last visited Oct. 25, 2024).

^[3] Id.

^[4] Gretchen Livingston, Family Size Among Mothers, Pew Rsch. Ctr. (May 7, 2015), https://www.pewresearch.org/social-trends/2015/05/07/family-size-among-mothers/.

^[5] Kendra Holten, The True Cost of Raising a Child, IFS (July 17, 2023), https://ifstudies.org/blog/the-true-cost-of-raising-a-child.

^[6] Elizabeth Napolitano, More young adults are living at home across the U.S. Here’s why., CBS MoneyWatch (Sept. 21, 2023), https://www.cbsnews.com/news/gen-z-millennials-living-at-home-harris-poll/.

^[7] Dylan Croll, A lot of young adults aren’t financially independent. Here’s what parents can do (July 9, 2023), https://finance.yahoo.com/news/a-lot-of-young-adults-arent-financially-independent-heres-what-parents-can-do-173631356.html.

^[8] Rachel Minkin, et. al., Parents; relationship with their young adult children, Pew Rsch. Ctr. (Jan. 5, 2024), https://www.pewresearch.org/social-trends/2024/01/25/parents-relationship-with-their-young-adult-children/.

^[9] Northwestern Mutual, As $90 Trillion “Great Wealth Transfer” Approaches, Just 1 in 4 Americans Expect to Leave an Inheritance (Aug. 6, 2024), https://news.northwesternmutual.com/2024-08-06-As-90-Trillion-Great-Wealth-Transfer-Approaches,-Just-1-in-4-Americans-Expect-to-Leave-an-Inheritance.

^[10] Id.

^[11] Id.

^[12] Id.

^[13] Id.