Do You Need an Estate Plan If You’re Single?
By: Barry E. Haimo, Esq.
August 20, 2020
Typically, the idea of passing money or material possessions on to a life partner or down to the next generation is the catalyst for most people to finally begin thinking about estate planning. So what about those who are single with no children?
If you fall into this category and haven’t given estate planning any thought, know you’re not the only one. You’ve probably been focused on your career, making the most of your free time, and likely squirreling a portion of it away to ensure you enjoy your retirement.
These are all great financial decisions, but there are a number of important estate planning elements even singles need to consider. You want to fortify your estate in a way that will serve you and whoever you choose best when you are no longer able to make decisions.
Here are three of those elements to think about:
Step One, Execute Two Important Documents
The very first estate planning step every single adult should make is executing two very important documents. One is a power of attorney (POA). The other, a health care proxy.
They are both utilized while you are still living. When you create these documents, you are required to select someone to make financial and medical decisions for you.
This is especially important for those who are not married and don’t have children because these are often the very family members who make those decisions when someone is unable to themselves.
Then, You Need a Will
Often a will is the only document someone has that addresses their estate. Still, less than half the people in the country — married or not — even have that. The important thing to remember is that your power of attorney and health care proxy are rendered invalid upon your death.
Perhaps the same person you name as your POA is the one you prefer as the personal representative (or executor) of your entire estate. A personal representative manages your estate and associated affairs after you are gone.
They assist with the probate process when necessary, they pay your final round of income and estate taxes for you, and they are assigned to do their best in carrying out your wishes for the estate’s property and money.
Or, You Create a Trust
Depending upon your personal goals, you may consider naming a revocable trust as the beneficiary of your estate. With this type of trust, you manage your estate essentially just as you do now throughout your life.
The trust can provide benefits (however you see fit) to yourself and any other party you choose. And when you die, very much like a will, the trust’s assets are given to those beneficiaries you’ve named.
However, in comparison to a will, there is far more flexibility in how your assets are distributed with a trust. You do not have to give those assets away outright. You can distribute them over time, or in portions, or based on certain conditions. Whatever you choose.
Beneficiaries do not need to be family members — or even people at all. You can choose organizations or business entities to benefit from your estate.
Partnering with an Experienced Estate Planning Team
These are just three key elements people need to address when it comes to their estate — no matter the family dynamic.
From simply answering straightforward questions like “When do I fund my trust?” to navigating complex tax implications, partnering with an experienced estate planning firm like Haimo Law is the best way to ensure you are getting the best guidance when planning your estate.
Want to learn more about how your estate could benefit from a little planning? Reach out!
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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