Do Singles Need Estate Planning?

Anyone can benefit by having a will, but singles often need help understanding the impact. Shutterstock

If you are single and do not have a lot of assets, why is it recommended that you create a will? Anyone can benefit by having a will, but singles often need help understanding the impact it could have on your assets and future health.

Since you are single or unmarried, you may not have any children to give your assets to when you pass. Without a will (i.e., intestate), the court decides for you where they go and to whom.

They will start the distribution with the closest family members and then proceed to reach further out to more distant relatives. It will not matter if your favorite cousin or nephew was interested in a particular item of value or sentiment.

Benefits of Having a Will

Making a will enables your assets to go where you want. It expresses your desires concerning your property, informing the court of your intentions. If you intend for a specific individual not to get any of your assets, disinherit them. FindLaw says that you can also specify that in your will.

The document also enables your assets to go through probate faster, which your beneficiaries will appreciate. A will can also designate your personal representative or executor to disperse the assets once probate has approved it.

If you have a charity or religious organization that you would like to donate to after your death, a will can designate how much and to which organization(s). Donations can also reduce the taxes owed by your estate. You can also make personalized gifts for up to $18,000 per year in 2024.

FindLaw mentions that a probate court will not direct any of your assets to a charitable organization if you do not have a will.

When children are involved, a will lets you designate a guardian. PNC says that a surviving parent has the first choice—if qualified. A will also allow you to set aside money for their care.

Creating a trust for your child will give you greater control and protection over the assets left for them. Putting money into a trust for the child is even more important if they have special needs.

Unmarried Couples

Couples cohabiting together may not be able to get any support from the deceased person’s assets, PNC says. Also, if you are living with stepchildren, a termination of your relationship may cause the loss of visitation rights. LawDepot says that courts distribute assets in a designated order, starting with a spouse, then children or grandchildren, parents, etc. When you have a will, you can specify who you want your assets to go to.

Designate a Health Care Power of Attorney

In the possibility that you should become incapacitated, you do not want to leave your medical care to just anyone. A health care proxy appoints someone you trust to make medical decisions for you after you cannot. Along with an advanced directive, these documents guide doctors and proxies in making medical decisions about your care based on the directions you provide. Talking with the individual to ensure they understand your wishes if you cannot make them for yourself is also advised.

Appoint a Financial Power of Attorney

When you cannot make decisions for yourself, a person with the power of attorney can legally act on your behalf. You choose an individual that you trust, and they will handle your financial matters for you after you become incapacitated. Their power can be limited to specific financial tasks or all of them. Their authority over your finances ends when you die.

The same person should not be given power of attorney over your health and finances. This division of power is more important if you have considerable wealth. Also, the proxy should be someone other than someone who will benefit from your assets once you are gone.

You can give power of attorney whenever you need someone to make medical or financial decisions for you. Investopedia says that if you want the power of attorney to continue after you become incapacitated, then you need to sign a durable power of attorney. A standard power of attorney is voided if the durable designation is not attached when you become incapacitated.

Single Women Need Estate Planning

Estate planning is essential for women who are single, widowed, or divorced. Most women tend to earn less than men. It may be because of seasons when they cannot work—such as when they become pregnant or a caregiver—and because they live longer than men.

Regardless of income, estate planning is necessary to enable women to have a sufficient income in retirement. Being single means paying more taxes on any income received, but there are ways to reduce your estate and taxes while you are still alive.

One way to reduce taxes and give more to your beneficiaries is to create an irrevocable trust. Assets put into a trust are kept out of probate court and distributed faster. Because the assets are not under your control, they are not considered part of your estate.

Put Beneficiaries on Your Accounts

Accounts with a named beneficiary—not the estate—do not go through probate court. They also are distributed quickly. It includes savings accounts, CDs, and more. Keep the beneficiaries named on these accounts up to date because the money in it will go to that person regardless of your will.

Estate planning for singles is much more than just a convenience. It is the best way to pass on your assets with less trouble. Consult with an estate lawyer or financial advisor to discover the best ways to transfer your assets and reduce taxes on your estate.

The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.