Estate Planning for Single People
Estate Planning for single people is often overlooked, it is a common misconception that the only people who need estate planning are those who need to care for their spouse or children after they pass away. Single people have a unique set of circumstances that actually make it more important for them to have an estate plan in place. What are they?
Those who are married use estate planning as an extra assurance that their assets will go to their spouse when they pass. However, even if they do not have any type of estate documentation in place, their assets will still pass to their spouse through the tedious probate process.
For single people, it is more urgent that they have named beneficiaries. If they do not have any documents in place that name someone specific, their assets will be distributed through the probate court according to their bloodlines. This would mean that the court would decide who their assets would go to, which would be the next person most closely related to the deceased, whether that is their child, parents, siblings, or other relatives.
To ensure that their assets pass to the people or charities that are the closest to their heart, it is extremely important that they set up a revocable living trust. This will leave specific instructions on what assets they want to have distributed and to which beneficiaries.
Agents and Powers of Attorney
Another aspect of estate planning that is unique for single people is who is going to make decisions for them if they are ever incapacitated. For married people, their health care, and financial decision-making abilities will automatically default to their spouse. If a single person does not have the proper paperwork in order, a distant or estranged relative or a court appointed representative could be making these important decisions for them.
To be properly prepared for such a situation a single person will want to execute a Health Care Power of Attorney, a Living Will, a Mental Health Care Power of Attorney, an HIPPA waiver, and a Financial Durable Power of Attorney. If all of these documents are in place, the person they most trust can be named to take care of their assets and make health care decisions for them if they are not able to.
Most retirement accounts and all life insurance policies need to have designated beneficiaries so that the money can be transferred to them when the owner passes. For married people, these accounts typically will pass to their spouses. But for a single person, it is important that they name a beneficiary and keep their designations up to date to ensure their savings are left to whom they desire.
Estate planning is an important step for everyone, whether married or single. Plan your estate as soon as possible so you can have the peace of mind that all of your affairs are in order. Not sure where to start? Meet with a qualified professional who can explain the estate planning process with you and set you up with a plan that will work best for your unique situation.