You may not think much about estate planning if you're single, but you should. If you don't have a spouse or close relatives, who will you leave your estate to? A close friend? A charity?
Additionally, you should specify who will make healthcare and financial decisions for you if you can’t make them for yourself. These documents are called Financial & Healthcare Power of Attorneys.
True story (names changed): a young woman graduates from a renowned Veterinary School fulfilling a lifelong passion for animals. At 32 years old, she enters a hospital for a suspicious heart condition. She dies. She is an only child. Her grieving parents grow apart and divorce. Her mother, now single, establishes a trust that, upon the mother’s death, will fund a scholarship program for underprivileged veterinary students in her daughters name at the Veterinary School.
If you die without a will, the State will locate your closest relative so that he or she can receive all of the proceeds of your estate. That may not be what you want. Here is the beneficiary seniority should you die without declarations (Will or Trust):
- Spouse
- Children
- Grandchildren
- Parents
- Siblings
- Nieces/Nephews
- Grandparents
- Aunts/Uncles
- Children of a deceased spouse
- Any relatives of a deceased spouse
- Your state of legal residence
You may have other intentions; a close friend, a charity or organization, scholarship or educational institution, a step-child, a trust to care for a minor or a pet, or maybe a business partner.
Do I really need a Will if I'm single?
If you have a positive net worth, the answer is yes. It's normal to choose people who mean something to you and who can benefit from your estate after you pass away.
If you prefer, there are various trusts you can set up, some of which are especially good at transferring money to charities.
Incapacity Planning for Singles
You may not have named a health care representative or indicated your wishes in a medical power of attorney or a health care directive. Without these, you'll have no control over who will represent you if you become temporarily or permanently incapacitated.
Someone will be making these decisions regarding your physical health. So, if the state can’t find a family member to represent you, everyone will be looking for an heir to act on your behalf. Thus, someone who may not know you will be making decisions about whether you will receive artificial sustenance or will become an organ donor.
A close friend, a professional representative, a lawyer or even a family doctor can be chosen to represent you. You need someone who you would feel comfortable with making decisions on your behalf. If you have strong feelings about resuscitation or other procedures, you need to make these known so your wishes are followed.
Inheritance of Your Business
If you’re a business owner, you'll want to consider who will inherit your business and determine what restrictions (if any) you would like to put on your beneficiaries. If you're an entrepreneur with no spouse or children, if you're widowed or divorced, estate planning can be a little more difficult. Ask yourself, do you want your shares to be left to a business partner or another loved one, or held in trust for a minor?
You are protecting yourself and your preferences with your estate plan, using it as a tool to help you protect your loved ones and the things that are important to you.
Contact Estate Planning Attorney Chuck Bendig today.
