Estate planning is just as vital for the single person as it is for a married couple. A comprehensive estate plan details how assets will be distributed upon death and also sets forth a strategy for incapacity. Incapacity can be short term or long term. A complete estate plan often includes a power of attorney, health care proxy, living will, and last will and testament. For many single clients, choosing who to give certain responsibilities to can be an extra challenge. For older clients, putting together a “team” of friends, family and professionals allows designated individuals to step in and meet their needs in a well-coordinated manner.
Planning for incapacity includes signing advance directives for health care. A health care proxy allows a person to appoint an individual to make medical decisions for them if they are deemed incapacitated by a physician. For married couples, the spouse is often the first choice to serve in this capacity. However, as a single person, the first choice may not be as obvious, and signing a health care proxy makes it clear who will be in charge of those decisions. A living will is a statement of wishes regarding end of life decisions. Having a clear roadmap for physicians and individuals making decisions in the case of incapacity is crucial. These decisions can include, but are not limited to, cardiopulmonary resuscitation, dialysis, cancer treatments, antibiotics, artificial nutrition and hydration. Taking the time to think about this in advance and put it on paper helps make certain your directions are followed if the situation arises.
Beyond decisions about health care, empowering someone to make financial decisions is also a vital part of an estate plan. Most single individuals hold all assets in their sole names, not joint with anyone else. For this reason, having an agent named under a power of attorney will be crucial to making sure an individual’s needs continue to be met if they are unable to manage their own financial affairs. What if you are in an accident and unable to pay your rent, mortgage or other bills? An agent under a power of attorney can be authorized to step in and do so. Giving someone access to accounts and the power to act on your behalf should not be taken lightly, either regarding the specific powers granted and the particular chosen agent.
A solid estate plan addresses death as well. A last will and testament will state who is in charge of the assets of the estate after death and how those assets should be distributed. The assets that pass through a last will and testament are those in one’s sole name, without a beneficiary. The creator of the last will and testament is the testator and the executor is the person put in charge after death. The last will and testament will be important to ensure the final debts and expenses are paid and the testator’s wishes are followed.
In some circumstances a living trust is advisable for a single person, replacing the last will and testament as the central document of the estate plan. A last will and testament requires the court process of probate at death. In many cases this process can be long and drawn out, especially for a single person. This is because the probate process requires notice to the legal next of kin. This includes your spouse and children, then parents, then siblings, and the list continues. A single person that does not have a spouse or children may not have living parents or siblings or may not want them involved in their estate. To avoid this probate process, a living trust may be the best option.
Unmarried individuals need an estate plan just as much if not more than their married counterparts. Seeking the advice of an attorney to complete your plan is incredibly important to see that it is done correctly and your wishes are followed.