Singles are the least likely to seek support from an estate planning attorney, and yet estate planning for singles may be even more important than for couples. In the case of married couples, the spouse automatically becomes the medical advocate, as well as the inheritor of the estate unless specified otherwise. If, however, singles do not prepare ahead of time, they are at the mercy of the courts if they become incapacitated and someone needs to make medical decisions for them. This situation can cause bitter dissent within a family.
Similarly, if you die while single and without a solid estate plan, your estate will likely be processed through the probate court. These courts follow specific guidelines for distributing an estate’s assets through channels of the immediate and extended family. In many cases, those distributions do not happen as the decedent (you) would have wanted them to.
Quick Review of Estate Planning Essentials
Here’s a quick review of estate planning essentials if you are new to the idea of wills, trusts, and other estate planning tools:
- The Will: A will is the quickest, first-step in estate planning, ensuring your estate is distributed as you intended, and not at the whim of the probate court. Read, How Does the Probate Process Work for more information on what would happen should you die without a will or estate plan in place.
- A Living Trust. If you have a larger estate of $166,250 or over it can be wise to establish a living trust. Trusts protect your heirs and beneficiaries from the expenses and duties of probate.
- Power Of Attorney. Your power of attorney (POA) is the person you designate to make financial, business, and legal decisions on your behalf if you become incapacitated.
- Advanced Health Care Medical Directive. This document specifies your preferences in a range of medical scenarios. It includes directives for when you want to be resuscitated and when you don’t, how long you would want to be on life support, etc. Because these documents are often contested by family, it’s highly recommended that you appoint a health care agent. This is like a POA of the medical world. If you have a legal estate plan with an identified health care agent, that person can make all of your healthcare decisions as you’ve specified in your medical directives.
- Stated Beneficiaries. These are the people who receive your assets after you die.
5 Tips To Help Estate Planning For Singles
The following tips will help you plan your estate while you are single, giving you a head start in estate planning 101. It also leaves you better prepared for future reviews of your estate plan in the event that you establish a domestic partnership, get married, and/or have children down the road.
Work with an estate planning attorney
While there are a variety of online estate planning tools, some are far better than others. Without the input and review of an estate planning attorney, you may spend hours creating DIY estate planning documents that are immediately overruled by a probate court if they are contested by a partner or your family.
Additionally, your attorney will ask questions and present scenarios that allow you to create a more accurate, detailed, and well-rounded estate plan than you would on your own. Visit What to Ask When Hiring an Estate Planning Attorney to learn more about how to find the best attorney for you.
Establish your POA and medical/health care agent
Your POA and medical/health care agent (also called a medical power of attorney) could be the same person, or it may not be. Please note that there is no need to name a family member for either of these roles. In fact, if you have a trusted distant relative, friend, or impartial colleague, they often make a better choice because immediate family members can have a difficult time remaining impartial and objective in the stressful or emotional scenarios that arise if they must fulfill these obligations.
And, make sure you’ve received permission from your POA and healthcare proxies before making the role legally binding to ensure they are up for the job. Your attorney will suggest choosing a “successor” POA or medical care agent in case your original choices are no longer able or willing to fulfill their obligations.
Identify direct beneficiaries for financial accounts
Most financial entities allow you to name stated beneficiaries for each financial account you hold, ranging from checking/savings accounts to investments, retirement funds, and life insurance policies
You’ll have the option to name one or multiple beneficiaries, and the percentage of the account they are to inherit upon your death. These days, setting up beneficiaries is as simple as getting online, logging in to each of your accounts, and adding them to your profile or a page dedicated to beneficiaries. You’ll need full names, birth dates, and social security numbers (if you have them). When you die, these funds transfer directly to those persons upon proof of a death certificate.
when estate planning for singles be sure to Identify your heirs
As mentioned above, probate courts have a specific order of inheritance that begins with a spouse and would then move to children/step-children (if they were in your life for the bulk of their childhood years), surviving parents, siblings, and so on. However, this may not be your preferred order of inheritance.
Therefore, it is essential to identify your heirs and which assets you want to inherit. This can include:
- Collectibles, antiques, possessions, etc.
- Financial assets that didn’t have beneficiary options
You also have the ability to set aside certain funds. For example, you may have a niece/nephew you’d like to send to college. Perhaps you’d like your long-term partner to pay off his/her school loans or to pay off the house you bought together. Maybe, you’d like to create an annual income for a member of your family or friends. All of this is available to you when you work with an estate planning attorney.
Revisit Your Estate Plan Regularly
Singles should revisit their beneficiaries and their estate plan on an annual basis. The estate plan you create at 20 or 30 may look slightly – or drastically – different than the one you would establish at age 40 or 50. You may have a new partner, you might have had a child, friends you assigned as beneficiaries or inheritors of certain assets may no longer be in your life, etc.
Routinely visiting your estate plan ensures your wishes will be honored with respect to your present situation.
Single Or Not We Can Help
Contact us here at Tseng Law Firm if you are single and want to learn more about creating a legally sound estate plan. We’re proud of the lifelong relationships we form with our estate planning clients.