I’m single and I don’t need an estate plan, right? It’s not like I have children or grandchildren to give my money to, so why bother? Unfortunately, it may not be as simple as that..
Keep this rule in mind before you decide if you should consult an attorney about estate planning: if you don’t make a will, the state will decide on the division of your property according to statutes. The state’s division may not be what you wanted, especially when it comes to single people.
Generally, if you are single, the state will pass your estate to your children or other living relatives. This is fine, most of the time. However, there are cases where a parent may want something else.
Here is where the truly depressing, singular scenario comes to fruition:
You are not married and have no children. You have no relatives, you lived a long and splendid life and outlived all your kin. You did not make a will or trust to devise your property to a friend or organization. Guess where your estate is going?
Your estate is going to the state. This may not please you. Any close friends you had that you assumed could be entitled to your estate, or any organizations that you ardently supported when you were living will receive no part of your estate. You may inadvertently be funding highway maintenance instead of continuing your life’s mission of helping shelter animals.
Think of it this way: Without a will, you have no compass and no direction. Without a will, you've lost your way.
Beyond creating a will to devise who should get your property after death, a single person could also benefit from creating a durable power of attorney. You would use this document to appoint an agent, called an “attorney in fact” who would make financial decisions on your behalf if you become incapacitated.
A close friend or trusted relative should serve as the “attorney in fact” for a single person. Having the power of attorney card in your deck can prevent a guardian from having to be appointed to act on your behalf in the event of your incapacitation. The process of drafting a durable power of attorney is less costly and time-consuming than a guardianship and will ultimately save your friends and family the trouble of going to court to be appointed as guardian and submitting annual reports on your welfare.
Another important document for a single person to have in place is a living will. The living will stipulates what will happen to you if you enter in to an end-stage condition such as a coma. Doctors must abide by this document and through it you can express your wishes and save family members the stress of making the decision for you.
Also, consider making a trust if you plan to give large sums of money to a niece or nephew you think may not have mastered the powers of restraint -- if you don’t want them to spend it all in one place. A charitable trust can also be set up to give monthly or yearly gifts to your favorite charitable organization.
In conclusion, I’m single and I don’t need an estate plan, right?
Well, not always. Unless you really want to help build that new expressway…