Estate Planning for Single People
If you’re like many single people, you may be wondering why you even need estate planning. Especially if you plan to leave your assets to your closest families members, as the state would likely assign them.
But, what if you could do more?
What if with some simple planning, you could fund a charity that’s dear to your heart or if you’re not-so-single but still not married and you want to lookout for your partner?
That’s when you need an estate plan.
Single people need estate planning too
Just because you aren’t married or may not have dependents doesn’t mean you should go without an estate plan. You’ve likely got assets you’d like to leave to certain people and chances are, you have some ideas about how you’d like to be cared for in the event you become seriously injured and incapacitated.
Without estate planning, your wishes are just that, wishes. By recording your desires and wishes in a legally binding plan, you can keep control of your future and gain peace of mind.
Take the time to think about these key elements when crafting your estate plan:
- Children or dependents
- Unmarried spouse or partner
- Assets and Debts
- Decision makers
- Life work & charity
- End of life plan
Protect your children and dependents
If you are a single parent, someone’s guardian, or have any dependents – young or old – estate planning can help you provide for them and protect them in the event of your death. With a complete estate plan and the proper documents, you can assign a guardian to care for dependents, leave assets to minors (with a trust) and even dictate how old they must be to take control of the inheritance.
Provide for a spouse or partner
Unmarried partners can plan to support one another after death, they just have to put a little more effort in than their married counterparts. By creating your will and naming your partner as beneficiary to specific assets, you can ensure that they will inherit as you intended.
Plan for taxes, your debts, and final expenses
Thinking about debt and final expenses is no fun. But, as a single person if you don’t pick up the bill, who will? Planning for your own funeral costs and debt payment can prevent someone you love from having to shoulder the expenses.
By leveraging trusts and other estate planning tools you can also minimize the chunk of your estate that’s taxed and fund and plan your own final expenses.
Update your beneficiaries
If you have any policies or accounts that have named beneficiaries, part of your estate planning process should be to update those beneficiaries to be the same as those in your will. If you fail to do so, you may inadvertently assign assets to individuals who won’t actually inherit them.
Assign decision makers
Estate planning is about more than money and assets, it’s about planning for your health and care as well. By leveraging important documents like a financial power of attorney and advanced health care directives, you can choose who will handle your finances in the event you cannot, how you want to be cared for when incapacitated, and who you trust to make decisions on your behalf, and much more.
Assigning your decision makers is a critical part of the single person’s estate plan because if you don’t do it, the state will do it for you and it won’t necessarily be the people you want who are put in charge.
Leave a legacy
Drafting your estate plan is the perfect opportunity to leave a legacy by earmarking funds as donations for your favorite charity, or creating a trust to fund an event, person, or organization.
You can literally leave money for “if” scenarios, like if someone goes to college, if someone gets married, if someone volunteers 100 hours to your favorite charity – you get the drift. It’s a chance to continue the work and causes you care about so much, even after your death.
You can get started today!
First things first, you need to create a will. It’s easy enough and you can even download one of our templates to get you started. Once you’ve got a guideline, follow the steps and list all your assets that you would like to assign, like property; investments, cash accounts, and other treasured possessions.
Just remember, some things are set up to have a default beneficiary or ownership transfer. If you assign something in your will, like property, that you do not own alone, the will can’t override the law.
This is also true for beneficiary designations. If you have an insurance policy or investment account that you have assigned a beneficiary to, that same person should be named in your will. Otherwise, you need to update the beneficiary filing because a will does not override a contract, and beneficiary forms are contracts.
Consider establishing a trust if it would benefit your estate
Single people miss out on a lot of the federal tax benefits married couples have with estate planning. But, that doesn’t mean single-life estate planning is without strategies.
In some cases you may benefit from establishing a living trust that will give your estate tax benefits a will transfer alone can’t provide. Additionally, putting assets into a trust means that less money will be spent on court fees and probate could potentially be avoided all together.
At minimum, draft a will and your advance health directive
Don’t delay another day. Even if you only get as far as to draft a will and fill out an AHD, take the time to assign your assets and leave record of your wishes for end of life treatment. Not only will you be taking control of your estate, but you’ll also have the security of knowing what decisions for care will be made at the end of your life.