Estate planning is something many people don’t think about until the last moment, often when they are under stress. Sometimes, people fail to think about it at all. One group of people in particular that is guilty of this is single people. Single people are those that have never been married, are divorced, or are widowed. However, it’s especially important for single people to consider who they want their heirs and beneficiaries to be and who will be the decision-maker for them if a health event leads them incapacitated.
An heir is defined as a person legally entitled to the property of another on the other’s death. For married people, this typically means their spouse. For a single person, it’s obviously not that simple. Assets are usually distributed along bloodlines which means that children (if the person has any), followed by parents, siblings, or other relatives are the default heirs. What happens if the single person has no living relatives to speak of? In this case, their assets may “escheat” or end up with the state. If a single person wants their assets to go to specific loved ones or charitable organizations, it is important that they create a will and/or a trust that specifically states how they’d like to see their assets distributed.
A beneficiary is defined as a person who derives advantage from something, especially a trust, will, or life insurance policy. Certain accounts, like retirement plans, require the account holder to designate a beneficiary when they enroll. What many people do not know is that even if the account holder has a will that lists someone different, typically the beneficiary designation on the account is upheld. This is an especially important fact for single people who were previously married to know and to make the necessary changes to their account to ensure that their accounts are not given to their former spouses if they don’t want them to be.
It is not a pleasant thing to think about but a health event or other type of incident could leave any of us incapacitated at any time. Important decisions, like whether to be kept on life support, could fall to distant relatives or state-appointed strangers.
Chances are, if you’re a single person, you would prefer to designate a trusted loved one, who knows you and your preferences, to manage your assets and healthcare decisions in case of an emergency. The way this is done is straightforward: The single person signs a power of attorney, an advance health care directive, and a HIPAA authorization to allow the family member or friend of their choice to make financial and medical decisions on their behalf. Just as with the accounts in which a beneficiary must be named, single people who have been previously married should reevaluate all of their accounts to ensure that this decision making power isn’t given to a former spouse if that is not what they want.
Thinking about end of life or emergency scenarios may give rise to feelings of anxiety or wariness for anyone, single or not, but it’s still important to do. With the assistance of an expert attorney who is trained in these matters, it can be a fairly painless process and then you can rest assured that everything is in place should the worst happen. Don’t hesitate to book your free consultation with us to discuss your estate planning needs and to ask us your questions. We are always happy to help.