Estate planning for singles is as important as for estate planning for couples. Many people think of estate planning and think that is the opportunity to leave your assets to your children or spouse. If you are single you may think that estate planning is not something you need to consider. Single or married, estate planning is something you should do. Below are four reasons why estate planning is important if you are single.
- Estate planning gives you the opportunity to decide what happens to your assets when you die. If you do not create and execute an estate plan, including a will or trust, your assets will be distributed as determined by state law. About money describes what can happen to your assets after death if you do not have a will or trust in place. “Here is what will happen under the Arizona intestacy laws if the deceased person is…
- Survived by descendants and no spouse – In this case the deceased person’s descendants will inherit the entire probate estate, per stirpes.
- Survived by a parent or parents and no spouse or descendants – In this case the parents will inherit the entire estate in equal shares or the surviving parent will inherit the entire estate.
- Survived by a sibling or siblings and no parents, spouse or descendants – In this case the siblings will inherit the entire estate, per stirpes.
- …In the unlikely circumstance that the deceased person is not survived by any family members as described above, then the entire probate estate will escheat to the State of Arizona.” If you have strained family relationships or would like a distribution different than those listed above you should invest some time in estate planning. State laws are also subject to change. The guidelines given above could be changed and your assets distributed in a way that you do not agree with. If you are single, you can create a will or trust that dictates how to distribute your assets to family members, friends or charitable organizations. Use estate planning to establish who your beneficiaries are and how much of your estate each will receive. Don’t leave this to be determined by the state.
- Estate planning allows you to be in control of your healthcare. If you are in a serious accident and need medical care you may not be in a position to communicate your wishes. The official website of the Arizona Medical Board describes advance care directives and why they are important stating, “Advance care directives, like a Living Will and/or a Durable Health Care Power of Attorney, allow others to follow your directions about your health care. They are your “blueprint” for what you do or do not want done in given situations. Advance care directives can provide specific instructions on how to proceed or the information your surrogates need to fulfill your intent. For a directive to be useful and effective, you must discuss your wishes with your primary care physician and close family members, especially the person you want to be in charge of carrying out your wishes.” The site goes on to explain that if you do not have a healthcare directive in place the healthcare provider may contact the following, in this order: your adult children, your parents, your siblings, and then close friends. An advanced care directive, will or healthcare power of attorney is critical to make sure that the person you designate is making vital healthcare decisions for you in the event of your incapacitation. You can also make sure that your wishes after death are carried out such as having a burial or cremation. It can be difficult to think about things like life support, levels of medical care in serious situations and death, but it is important for you to decide how you would like these situations handled. It is also important to make sure you communicate your wishes through your estate plan, especially if you are single, and do not have a spouse to automatically make these decisions for you. After consulting with an estate planning expert and completing your estate plan, you can file your healthcare directives with the state of Arizona at: http://www.azsos.gov/services/advance-directives.
- Estate planning may give you the ability to keep your assets and distribution private. When working with an experienced estate planner you will want to communicate your wishes to keep your estate private. If you use a will to designate your beneficiaries and distribution of your estate you will may go to probate which is a public process. However, if you utilize a trust, you may be able to keep the terms of your estate’s distribution and beneficiaries private.
- Estate planning can set your heirs up for success. You need to consider that depending on the size of your estate your heirs may face high estate and income tax penalties. Working with an estate planning professional you may strategically distribute your wealth to help your loved ones avoid high tax penalties. Different types of assets can also be taxed differently. It is important to consult with someone who understands the tax implications for each of your assets and can help you determine the best way to distribute them. You can also decide the timetable in which your assets are distributed. If you have two siblings you would like to make your beneficiaries and one is terrible with money while the other is not, you may setup a distribution so that the first sibling receives a portion of your estate every year for 10 years while the other sibling receives a lump sum. You know your loved ones best and how your estate could be structured to best benefit each individual person.
Whether you are married, single or divorced estate planning is a critical tool in executing your wishes for your medical care and asset distribution once you are gone. If you have friends or family that you would like to act for you as a healthcare representative, plan ahead. If you have accumulated wealth you would like to leave to specific people or charities, plan ahead. Your health and wealth decisions are both excellent reasons estate planning is important for single people and married people alike.