When we think of estate planning then most of us are having the thought that it is meant for the married only as couples have spouses and children who are dependent on each other while in case of singles they don’t need to protect anyone in their absence. However, the fact is that the singles too equally need estate planning and that too especially for themselves. Interestingly the singles live a carefree lifestyle but when it comes to estate planning it is a bit more complicated for them as compared to the married couples.
The recent US Census revealed that more than 50% of adult Americans are single. Being single most of them don’t have their estate plan with them. Such singles without any estate plan are required to focus on their own protection and lay the outline so that there will be someone else to take financial and medical decisions on their behalf when they get incapacitated due to severe injury or illness. If there is none assigned, then anyone might get appointed as the guardian to take decisions on their behalf.
Also, if the person dies intestate i.e. without a will then the state holds the authority to distribute your assets either to the closest relatives like children, parents, siblings, etc. or if there isn’t any alive close relative then it might go to the state.
In order to avoid such situations, it is mandatory that you must have your estate plan ready to be assured that your wishes will get fulfilled. The first step in this regard could be either to create a will or a trust as these documents would be sufficient to ensure you and your assets during your incapability and after your death. Both the things would avoid probate. In case of a trust, you can even name a trust protector, who is your trustworthy and know your goals, to ensure your wishes are being fulfilled. But remember, the trust protector has the authority to remove and replace the trustee, so choose your trust protector wisely.
Estate Planning for Singles
If you already have your estate plan, then it is advised to always update it according to the life-changing circumstances to safeguard your estates. For instance, if earlier you have designated your ex-spouse and now you don’t want him/her to inherit your assets then you need to designate a new beneficiary in all the documents related to the assets.
In the absence of authority, unmarried partners and friends are prevented from taking the decision on your part, hence a durable power of attorney and healthcare proxy are also very important for singles. While a power of attorney will allow the person chosen by you to take your financial decisions, a health care proxy will allow the person of your choice to take your medical decisions if you ever become incapacitated.
Below is a brief to help the singles to prepare the document for their estate planning to manage their assets including health:
A will: A will is a legal document that specifies your estate plan describing the name of beneficiaries who will inherit your assets, guardian for your minor children and an executor designated to distribute your estate to the beneficiaries. The executor should be trustworthy and chosen carefully.
A durable power of attorney: Through this legal document, you can designate someone to manage your financial and personal assets when you are unable to do so. The nominee should be someone who is a trustworthy friend or family member with strong financial understandings.
Health care power of attorney: A health care directive is a legal document that carries your medical wishes if you are unable to do so. This document authorizes an individual to take the medical decisions on your behalf and ensure your proper treatment.
Trust: If the estate’s value exceeds the federal estate tax exclusion, a single person’s estate can be hit with estate taxes along with the state-level estate tax after his/her death. So singles may consider to set up a trust to reduce estate tax along with managing the assets. A living trust places your assets in the trust and your successor trustee will then transfer them to your designated beneficiaries after your demise. It can also provide for distributions at certain intervals, such as when the beneficiary reaches a certain age or after he or she graduates.
A living will: This legal document summarizes your wishes about what kind of treatment you want in case you become incapable to do so. It also includes your end-of-life medical treatment in a dire medical situation. A living will is revocable at any time.
So, the singles if you don’t have your estate plan prepared or you have any doubt while doing so, we would suggest you meet an estate planning attorney and financial advisor for proper advice and assistance.