When people think of estate planning, they usually think of married people passing on their assets to their children and grandchildren. However, mastering estate planning for single people is just as important if not more important. During a marriage when one partner dies their estate taxes and assets are automatically passed onto the spouse, unless deemed otherwise. When you’re single there isn’t a person who this automatically defers to, so estate planning is actually more important.
What Happens Without Any Planning?
If you haven’t done any estate planning then your estate will pass on to your children, and if you don’t have any, then onto your parents. If your parents aren’t alive, then it will continue to pass down the line to any living siblings, and continue onward onto distant relatives. No matter your intent of your estate after you pass or become incapacitated.
If you’re currently in a cohabitation relationship, your estate still won’t pass on unless you’ve done proper planning.
Even if inheritance of the property upon death isn’t a big issue for you, you’ll still want to have planning in place in case you become incapacitated. As a judge may appoint a relative or stranger as your guardian, who will make all of your decisions. If your estate is planned out you’ll be able to choose whom this person will be.
Overall, it’s a good idea to take the time to plan out your estate, as you’ll be able to avoid any unintended consequences of not planning.
Power Of Attorney
At the very minimum you should have a durable power of attorney in place. This will be very beneficial if you happen to become incapacitated or pass away. Through the power of attorney you will be able to assign responsibility to selected individuals.
The amount of power you give to the power of attorney is up to you; you can either assign limited power, or give broad discretion. Broad discretion is the most common as it allows the attorney to make all appropriate decisions regarding management of the property and all related affairs.
Without this in place you run the risk of having unintended consequences befall your estate.
Your Revocable Living Trust And Last Will
Your revocable living trust is a document that helps with managing your assets and can be managed during your lifetime. If there is ever a challenge to your will, then the living trust will be used in consideration.
Your last will is an estate planning document that allows you to either set a personal representative for the distribution of your estate, or even direct certain pieces of property to charities, and certain individuals.
Updating Your Beneficiary Designations
Essentially your beneficiary designations are where you would like your bank accounts and other retirement accounts distributed to. Usually, you’ll want to keep your beneficiary designations as up to date as possible, especially if there’s been a big change in the family.
Overall, it’s very important to consider planning your estate, especially if you’re a single person. If you need assistance planning your estate, or have any questions at all we hope you get in touch as soon as possible.