Estate Planning for Singles
Remember that great episode of “Friends” where Ross convinces Rachel, Phoebe and the others to sit down and write their wills and designate durable power of attorney in the event something should happen to them? Of course you don’t; it never happened. The fact is, singles don’t bother with estate planning. For sure, part of the joy of being single is the no-strings-attached lifestyle. The term “estate planning” sounds like something only grandparents do.
Not to be overly grim, but singles can face the inevitable as much as anyone else. In fact, many estate planning attorneys believe that singles need it more. In a marriage, it is pretty much assumed that a spouse, even in the absence of any planning, is going to be the person that the court is going to appoint as the guardian over your personal and health care decisions and conservator over your financial matters. But if you’re single, who is it going to be? If you’re single, you need to appoint the people to make your personal, health care and financial decisions or the court will decide, and it may not be the party you would want.
Consider these scenarios. If you’re single without kids and you die without a will (“intestate”), your assets would likely flow to your next of kin in this order: surviving parents, siblings, nieces and nephews. If you are divorced with children, your assets would likely go to your children as next of kin, but if something happens to them, your assets could wind up with your ex-spouse as their next of kin. That’s right! If you don’t specify otherwise, your ex-spouse (and his or her new spouse) could get your money when you die. Is that OK with you?
Many singles consider estate planning to be too expensive. Most singles figure they don’t have much money, and they usually don’t do estate planning. But often they find they have more assets than they think. Add up assets to get a real awakening to your financial situation. Singles often have a life insurance policy through an employer, perhaps a nominal retirement account fed by their paychecks, equity if they own a home, and often assorted accidental death benefits from credit cards. Once their estate has been settled, a parent, a sibling, a niece or nephew will most likely end up with this modest windfall.
We plan in order to designate who will be responsible for our health care and financial decisions when we are no longer able to do so ourselves. Seven out of ten Americans have no estate plan at all, and most of the 30 percent who do have not kept them up to date with current tax laws. You may have every intention of leaving your nephew your Jimi Hendrix autographed guitar, but without a will or other estate planning vehicle, the court may sell it off in an estate sale so the money can be distributed. What is the solution to most of these issues? Make a goal to get your affairs in order. I would be dishonest if I said, “Estate planning is fun.” However, I have seen over and over the peace of mind that comes when it is completed. In the end, the peace of mind far outweighs the worry of not having a plan
