These days, more people are living single than ever before. In 1970, about one-third of Americans 15 and older were single, according to U.S. census data. In 2020, that number is closer to 50 percent.
Whether never married, divorced, or widowed, single people need to pay just as much attention to their estate planning as married people. Single people face unique estate planning issues that require advanced planning, time, and the help of an experienced professional.
Below are some of the most complicated estate planning issues for singles:
When married people die without a will, their assets typically pass to their spouse. But what about single people? Assets are usually distributed along bloodlines, so children (if any), followed by parents, siblings, and other relatives, would be the default heirs. If a single person has no living relatives, his or her assets might wind up with the state.
To ensure their assets wind up with the relatives, loved ones, and charitable organizations that they prefer, single people should create a will and, if they want to avoid probate, a trust that specifically states how they would like their assets to be distributed.
A health event or other incident could leave any of us incapacitated. For single people, it is important to designate a trusted loved one or friend to manage assets and healthcare decisions in case of an emergency. Without proper directives, those decisions could fall to distant relatives or court-appointed guardians. The appointment of a guardian can be a costly and time-consuming processing requiring examinations by multiple physicians and continual court visits. Single people, if they have a trust, should also consider naming multiple successor trustees within their trust document so that the successor trustees can immediately take over the administration of the trust in situations involving incapacity.
Single people should also sign a general power of attorney, an advance healthcare directive, and a Health Insurance Portability and Accountability Act (HIPAA) authorization, which allow chosen loved ones to make financial and medical decisions on their behalf.
Certain accounts such as retirement plans and insurance policies require account holders to designate a beneficiary when they enroll. Other accounts such as savings and checking accounts allow account holders to make optional beneficiary designations. The beneficiary designations are typically upheld when the account holder dies, even if the account holder gave the account to someone else in a will or trust.
Everyone, not just single people, should periodically reevaluate their beneficiary designations to ensure accounts will not be given to former spouses, disinherited family members, or deceased individuals if that is against their wishes.
Those are just a few of the ways estate planning can be complicated for single people. It is wise for single people to contact an estate planning professional as soon as possible to make sure all bases are covered and their assets are distributed according to their wishes. Contact Cox Law Group ((410) 988-3973; email@example.com) today to schedule a conversation. We look forward to working with you.