From our “Ask a Question” Mailbag: Is it necessary for a single person to do estate planning?
Most Recently Updated June 27, 2018.
While the single lifestyle is usually thought of as carefree when compared to married life, when it comes to estate planning a single person’s decisions and plan may prove more complicated than for a married couple. Whether you have never been married, are divorced or have outlived your partner, estate planning is vitally important to ensure that your wishes are carried out.
What happens if a single person dies without a will?
If a married person dies without a will, typically all the assets are held jointly so the estate passes directly to the surviving spouse. However, if singles die without a will or other estate planning documents, real estate and bank accounts are typically held only in the single person’s name. If a single person dies without a will, or “intestate”, these assets pass under the Rules of Intestacy. This means the state decides who inherits the assets, not you.
For most states, if a single person dies without a spouse or children the intestate estate passes to the person’s parents or, if there are no living parent, a more distant relative. In addition, married couples have the ability to leave their property to their spouse free of estate tax, no matter the value. Single people of most states, however, do not have this option. With a proper estate plan, a single person’s estate can avoid taxes.
What happens if a single person becomes incapacitated?
Singles who are still living but have become incapacitated could run into even more issues. The fate of their medical care and estate could fall into the hands of a distant relative or stranger appointed by the state as their guardian. With a proper estate plan, you are able to honor friendships, charities, and an unmarried partner.
What steps should a single person take to protect assets?
The first option to remedy the above situations is to create a will or, if appropriate, a Revocable Living Trust. These documents, when used together, provide specific instructions on how you would like your assets distributed after you die. By allowing a trustee to distribute your assets to your beneficiaries, probate can be avoided. Naming someone familiar with your goals as a Trust Protector can also help to ensure your wishes are followed. A Trust Protector is given the authority to remove and replace a trustee that is not following your wishes.
What if I already have an estate plan but life circumstances have changed?
Having your estate planning attorney assist with updating your beneficiary designations is also an important part of safeguarding your estate. No matter what your will or trust says the people named on your beneficiary designations will inherit those assets. Without making the necessary updates, an ex-spouse could inherit your life insurance policy or investment account.
Does a single person need a Power of Attorney or Living Will?
Durable General Powers of Attorney and Medical Powers of Attorney/Living Wills also play a major role for singles. Usually, unmarried partners or friends aren’t able to make medical and financial decisions for each other without the proper authorization. Having a power of attorney allows any person you choose to manage your assets should you become incapacitated. A living will allows you to choose a health care agent who can make medical decisions for you if you become too ill to do so yourself. By placing an agent of your choosing in these important roles, you can ensure that the person who knows you best is making medical and financial decisions that will benefit you and your estate.
More Planning Questions?
Estate Planning for a single person is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.
In Conclusion: Estate Planning for the Single Person
I hope that this article was helpful in explaining (focus keyword). Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!
Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers. By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!
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