Single clients often don’t think about estate planning as much as married clients, especially if they don’t have kids. But, estate planning is even more critical for singles than married couples—and it has nothing to do with whom you’ll leave assets to when you die. A recent article from AARP, “6 Estate Planning Tips for Singles,” explains how estate planning addresses support during challenging life events.
To consider this, keep in mind that estate planning addresses medical and financial decisions for an incapacitated person, not just where you leave property when you die. For singles, these may be more complex questions to answer.
Whether someone has never married or is divorced or widowed, these are challenging questions to answer. However, they should be documented. In addition, singles with minor children need to nominate a trusted person who can care for their children if they cannot. Estate planning addresses all of these issues.
To be sure you complete this process, start with a conversation with an experienced estate planning attorney. This will help with accountability, ensuring that you start and finish the process.
See the original article for the fuller list, but here are some pointers for singles who keep putting this vital task off:
1.What would happen if you don’t leave clear instructions about who makes decisions for you during your incapacity? Some states have default decision makers for medical decisions, but not for financial ones. Also, how will the person who acts (whether you chose them or not), know if you don’t want to be placed on a ventilator for artificial breathing or fed by a stomach tube while in a coma? Or how will they know what financial decisions you are ok with?
2. Dying without a will is known as dying “intestate.” All of your assets will be distributed according to the intestate succession laws in your state. That very often isn’t what clients wanted or are expecting, and typically is a far more expensive and time consuming process. Also, singles often want to leave assets to friends or non-family loved ones, and none of those individuals are beneficiaries in intestate laws.
3. Part of your estate plan includes naming a personal representative—an executor—who will oversee your affairs after your death. You’ll want to designate someone who is organized, has good judgment and can handle financial matters. You should also name a backup, so that if the first person cannot or does not wish to serve, there will be someone else to take control. This same issue applies to your financial and medical decision makers.
4. Your estate plan should include or at least consider the following:
Last will and testament. This is where you nominate your executor, heirs and how your assets will be distributed. Note that anyone named as a beneficiary on a retirement, insurance policy, or investment account supersedes any instructions in your will, so be sure to update those and check on them every few years to be sure they are still aligned with your wishes.
Living trust. This is a legal entity owning assets to be given to beneficiaries, managed by a trustee of your choosing, and avoids the delays and costs of probate. It also is helpful with managing assets during your incapacity
Financial Power of Attorney (POA). This document authorizes someone you name to act as your agent and make financial decisions if you cannot. A POA can prevent delays in accessing bank and investment accounts and paying your bills. The POA ends upon your death.
Living will, medical power of attorney, or advance health care directive. Different states use different documents here, but generally these documents allow you to designate someone to communicate your health care wishes when you cannot. For example, you can include instructions on pain management, organ donation and your wishes for life support measures.
Guardianship Nominations. If you lack a fiduciary to control one of the issues described above during your lifetime, a court can appointment someone to do so. That is far from ideal, but you can name who you want to be your guardian should it be necessary. You can use similar documents to name guardians for your children.
Final Interment. Estate plans, either through standalone documents or through the ones mentioned above, can indicate your final interment wishes (e.g. burial) and who you wish to be in charge of that process.
5. Be sure to communicate your wishes with family, friends and other advisors. Tell your fiduciaries where your documents may be found and provide them with the information they’ll need so they may act on your behalf.
Finally, we have a page on our website devoted to this topic, so see here for more ideas: https://galligan-law.com/estate-planning-life-stages/planning-for-singles/
Reference: AARP (April 7, 2023) “6 Estate Planning Tips for Singles”