Many people believe that if they are single, they don't need a will or other estate planning documents. But estate planning is just as important for single people as it is for couples and families.
Estate planning allows you to ensure that your money and property will go to the people you want, in the way you want, and when you want. If you do not have an estate plan, the state will decide who gets your assets and who will make decisions for you should you become unable to communicate your wishes, and these aren't necessarily the choices you would have wanted. An estate plan can also help you minimize estate taxes and save on court costs for your loved ones.
Last Will and Testament
The most basic estate planning document is a will. If you do not have a will directing who will inherit your money and property, your estate will be distributed according to state law. If you are single, most states provide that your estate will go to your children or to other living relatives if you don't have children.
If you have absolutely no living relatives and no will, then your estate will go to the state. Or, you may not want to leave your entire estate to relatives – you may have close friends or charities that you feel should get something. Without a will, you have no way of directing where your property goes. (Learn more about what happens if you die without a will in another article.)
Durable Power of Attorney
The next most important document is a durable power of attorney. A power of attorney allows a person you appoint – your "attorney-in-fact" or "agent." This individual acts in your place for financial purposes if and when you ever lose capacity. In that case, the person you choose will be able to step in and take care of your financial affairs.
If you do not have a durable power of attorney, no one can represent you unless a court appoints a conservator or guardian. That court process takes time, costs money, and the judge may not choose the person you would prefer.
Health Care Proxy
In addition, you should have a health care proxy. Accidents and illnesses can befall us at any time. If you become unable to communicate your health care decisions or personal preferences for medical treatment, who will make them for you?
Similar to a power of attorney, a health care proxy allows an individual to appoint someone else to act as their agent, but for medical, as opposed to financial, decisions. Unmarried partners or friends usually can't make decisions for each other without signed authorization.
Other Legal Documents
If you are planning to give away your money, there are ways to do that efficiently through the annual gift tax exclusion and charitable remainder trusts. Other estate planning documents to consider are a revocable living trust and a living will.
Finally, for singles who are unmarried but have a partner, an estate plan is arguably even more important than for married couples. Without one, unmarried couples won’t be able to make end-of-life decisions or inherit from each other.
Don't think that because you are single, you don't need an estate plan. Contact an experienced estate planning attorney near you to determine what documents you need to assure your wishes will be carried out and those you love will be protected after you are gone.
To learn more about estate planning, check out the following articles:
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