Estate Planning as Important for Singles

by Jackie Bedard

 

When a person dies without a last will and testament, assets are disbursed according to the laws of the state. For married people, that means a surviving spouse inherits those assets, even if they’re not jointly titled. For a single person, the same law means the assets will be handed off to close relatives (i.e. children, parents, siblings). When no relatives are available to inherit the estate, assets might even go to the state. The best way to keep the government from choosing the fate of your assets is to ensure you have the following essential documents in an estate plan:

Will

The primary piece of the estate plan should always be a will. Single people may have special considerations to keep in mind while creating this document.
Who do you want to be the executor if you don’t have (or want) any relatives to assume the task? You may choose a close friend or an objective third party. Also, naming beneficiaries for a single person may not be as obvious as it is for married people, particularly if there are no children or close relatives.

  • Who will inherit items with sentimental value?
  • Who will care for a beloved pet?
  • Is there a charity or organization you would like to support with donations of your assets or the liquidation of your estate?

Durable Financial Power of Attorney

If you are incapacitated due to illness or injury, who can legally make financial decisions on your behalf? Married people generally name their spouses as durable financial power of attorney to manage their money issues. As a single person, you may choose a trusted friend or a close relative to handle financial affairs while you are unable to do so.

Healthcare Power of Attorney

At the same time, who speaks for you during a medical crisis? Who is authorized to discuss your condition with doctors and make decisions about treatment and care? This person does not have to be the same one you named as financial power of attorney, but the role should be filled by someone who will act according to your expressed wishes regarding medical decisions.

Beneficiary Designations

Single people should also ensure that life insurance and retirement plan beneficiary designations are updated regularly to reflect life changes. Our suggestion is that these designations should align with your beneficiary designations in the will to avoid confusion for loved ones.

Trust

There are several instances in which a single person is much better off to place his assets into a trust than to rely on a simple will. A well-drafted trust is designed to ensure those assets are distributed according to your wishes without probate. In many cases, creating a trust will be far less expensive than what the estate will lose to probate costs (e.g., court filings and attorney fees).

A trust can also help a single person who wants to ensure a pet is properly cared for after his or her death, that a disabled loved one continues to receive financial support, or that a cause or charity will continue to benefit from the legacy he or she leaves behind. The protective powers of a trust are critical for business owners and professionals that want to ensure that what they worked so hard to achieve doesn’t simply dissolve upon death.

Don’t Ignore It

In the end, we know estate planning can seem like a daunting task, especially if you are unmarried. Many ignore the problem, accounting for a large number of single people who don’t even have a simple will. You may have special considerations that need to be addressed and require sound planning.

 

Bedard, an elder law attorney with Carolina Family Estate Planning, can be reached at 919-443-3035.