Estate Planning for Singles: Why and How To Start

An estate plan is a way for you to decide what happens to your property after death. Even for single people without a partner or children, a comprehensive estate plan can provide for friends or charities. You can also determine who will make medical and financial decisions on your behalf if you are unable. Without an estate plan, the state decides who gets your property. 

A basic estate plan is simple and inexpensive. Single people should also revisit their estate plan regularly or after major life events. For more information about why estate planning is for everyone, talk to an estate planning and probate attorney. 

Why Do Single People Need an Estate Plan?

Every person can benefit from an estate plan, including young, single people. Even if you do not have a significant other, children, or loved ones you want to provide for after you die, you have other options with your beneficiary designations. You can name your favorite charity, church, non-profit organization, or university.

Young people often think they don’t need an estate plan because they have so much time ahead of them. However, many people continue to put off estate planning until they are in their 60s or older. Life is unpredictable, and an unfortunate accident can happen at any time. It is better to have a plan in place and not need it. A basic estate plan is simple and inexpensive.

Estate planning also involves end-of-life care and providing for yourself while you are still alive. Without planning for incapacity, state law or a surrogate will decide your health care decisions if you cannot communicate your wishes.

Where To Start With an Estate Plan

The most common estate plans include a will, a revocable living trust, and a medical power of attorney. Your estate plan depends on your individual situation, property, and financial assets. The most basic plan involves making a last will and testament and a durable power of attorney.

Last Will and Testament

A last will and testament is the best-known estate plan and can range from a few words to a multi-page document. Your first will can be a basic document that you draft yourself or even use a qualifying online template. For more complex estates with extensive assets, you should consult with an attorney about making your will.

A will generally provides for what assets go to which beneficiaries. For example, you could leave all your property and assets to a family member, close friend, or charitable organization. Your will should also designate an executor as the person who handles your estate.

The requirements for a valid will vary by state. Generally, it should be in writing, signed by the testator (the person creating the will), and usually requires the signatures of two competent witnesses. Check with a local estate planning lawyer about the legal requirements in your state.

Living Will and Medical Power of Attorney

A living will and healthcare power of attorney can plan for incapacity while you are still alive. These health care documents provide for what happens if you cannot communicate your health care wishes because of injury or illness.

Your living will can name a healthcare proxy to make medical decisions on your behalf. You can also indicate end-of-life care preferences, including refusal of life-sustaining care.

A power of attorney gives someone the power to make decisions on your behalf. A financial power of attorney can manage your financial affairs during your incapacity. A medical power of attorney can make health care decisions. You can designate the same or different people to make health care and financial decisions.

Revocable Living Trusts

A revocable living trust is a legal document that controls what happens to certain property during your lifetime and after your death. As the grantor, you transfer ownership of property to a trust. The named trustee manages the property and assets for the beneficiaries’ benefit.

With a living trust, you can still use and access your property while you are living. After you die, your assets automatically transfer to your named beneficiaries without going through probate.

You can also change your mind and modify or revoke the trust, giving you flexibility over your estate plan. Trusts are faster and more efficient than probate, and can handle assets in multiple states. Trusts are also private and confidential and do not need to be part of the probate public record.

There are other types of estate planning trusts, including irrevocable trusts and special needs trusts. Talk to a trust and estate lawyer about how you can benefit from a trust as part of your estate plan.

Who Gets Your Money Without a Will?

Without an estate plan, your state’s intestacy laws determine how your assets are distributed when you die. Generally, state intestacy distributes property to your nearest legal relatives.

In most states, if you’re married, your property goes to your spouse. If you do not have a spouse, it goes to your descendants. If you do not have descendants, then to your parents, and so on. If the probate court cannot identify any relatives, your property goes to the state. 

Consider who will inherit your property through intestacy. It may go to a relative you don’t like or to someone who doesn’t need your money. An estate plan can stop the property from going to that relative, and you can choose anyone else as your beneficiary.

How Much Goes to the Probate Court?

Without a will, the probate court process can be long and expensive. The court generally appoints an executor or administrator to manage the estate. Without an estate plan, the representative needs to track down your assets, property, debts, and beneficiaries.

The administrator also pays off tax debts, including estate, federal, state, and local taxes. Probate can cost about 3% to 10% of your estate. However, proper estate planning can reduce or avoid probate costs and expenses.

Reviewing and Updating Your Estate Plan

A young person’s life can change quickly, with major changes in their own life and among family and friends. You should review your estate planning documents regularly to determine what needs updating.

Review your wills, trusts, and beneficiaries any time there is a major life event, including:

• Birth of a new family member
• Marriage or divorce
• Buying or selling a home
• Inheritance
• Moving to a new state

If a sibling has minor children, you may want to change your will to provide something for your nieces and nephews. If you move to a new state, you should review your plan, as state laws vary.

Providing for a Pet in Your Estate Plan

Estate planning is not only for people with children. You can provide for a pet cat, dog, horse, or other animals in your estate plan.

You cannot designate a pet to inherit your property, but you can designate a caregiver or establish a pet care trust to provide for a pet after you pass away. A pet trust can also designate a person to care for your pet if you are unable because of health issues or incapacity. 

A pet trust designates funds to provide for the care and maintenance of your animal companion (feeding, board, vet bills, etc.). Your trust can also provide for your pet care wishes, including diet, recreation, and a specific veterinarian. Your trust can also include instructions for burial or cremation after your animal passes away.

Get Legal Advice From an Estate Planning Attorney

Estate plans are flexible and allow you to designate different types of beneficiaries, even if you are single and don’t have any children. Estate planning can also protect your interests if you become incapacitated.

Making a basic estate plan is less complicated than you may think and gives you peace of mind for the future. Contact a local estate planning lawyer for more information about starting your estate plan.