People who delay or forego a life that involves marriage and parenting can make estate planning a low priority or at least fail to take it as seriously as they should. If you are single with no children, you might think that there’s really no need for you to worry about creating an estate plan. But this is a huge mistake. In fact, it can be even MORE important to have an estate plan if you are single and childless.
If you are single without kids, you could face several potential estate planning complications that aren’t an issue for those who are married with children. And this is true no matter what tax bracket you’re in. Without proper estate planning, you could jeopardize your assets and your health care decisions. And that’s not even mentioning the potential conflict, mess, and expense you would leave for your surviving family and friends to deal with when something unexpected happens to you.
With that in mind, if you’re single and childless, consider these three inconvenient truths before you decide to forego estate planning.
1. Someone Will Have to Handle Your Stuff
Whether you’re rich, poor, or somewhere in between, in the event of your death, everything you own will need to be located, inventoried, managed, and passed on to someone, which can be a massive undertaking in itself—one that few families are properly prepared for even if everyone gets along.
In fact, following a loved one’s death, American families spend an average of 500 hours and $12,700 over the course of 13 months (20 month if probate is required) to finalize the person's affairs and settle their estate, according to the first annual Cost Of Dying report released this March by tech startup Empathy in partnership with Goldman Sachs. Look for additional articles in the coming weeks covering the Cost Of Dying and the new role Empathy is playing in the end-of-life industry.
On top of the logistical complications involved with finalizing your affairs, without a clear estate plan, including a will or trust, your assets will go through the court process of probate, where a judge and state law will decide who gets everything you own. In the event no family member steps forward to initiate this process, your assets will become property of the state.
Why give the state everything you worked to build? And even if you have little financial wealth, you undoubtedly own a few sentimental items, maybe pets, that you’d like to pass to a close friend or favorite charity.
However, it’s rare for someone to die without any family members stepping forward. It’s far more likely that some relative you haven’t spoken with in years will come out of the woodwork to stake a claim. Without a will or trust, state intestacy laws establish which family member has priority for an inheritance. If you’re unmarried with no children, this hierarchy typically puts parents first, then siblings, then more distant relatives like nieces, nephews, uncles, aunts, and cousins.
Depending on your family, this could have a potentially troubling—and even deadly—outcome. For instance, what if you are really close to a cousin, but your closest living relative is your estranged brother with serious addiction issues who you’d really not want to inherit your savings?
If your estate includes significant wealth and assets, this could lead to a costly and contentious court battle, with all of your relatives hiring expensive lawyers to fight over your estate. In the end, this could tear your family apart while their lawyers make money—all because you didn’t think you needed an estate plan. We work with single people to create an estate plan that ensures that their assets will pass to the proper people, while avoiding both unnecessary court proceedings and family conflict.
2. Someone Will Have Power Over Your Healthcare
Estate planning isn’t just about passing on your assets when you die. In fact, some of the most critical aspects of estate planning have nothing to do with your money at all but are aimed at protecting you while you’re still very much alive.
Proactive planning allows you to name the person you want to make healthcare decisions for you in the event you are incapacitated and unable to make such decisions yourself. This is done using an estate planning tool known as a medical power of attorney.
For example, if you’re incapacitated due to a serious accident or illness and unable to give doctors permission to perform a potentially risky medical treatment, it would be left up to a judge to decide who gets to make that decision on your behalf. If you have a romantic partner but aren’t married and haven’t granted them medical power of attorney, the court will likely have a family member, not your partner, make those decisions. Depending on your family, that person may make decisions contrary to what you or your partner would choose.
And if you don’t want your estranged brother to inherit your assets, you probably don’t want him to have the power to make life-and-death decisions about your medical care either. But that’s exactly what could happen if you don’t put a plan in place.
Furthermore, your family members who have priority to make decisions for you could keep your dearest friends away from your bedside in the event of your hospitalization. Or family members who don’t share your values about the type of food you eat, or the types of medical care you receive, could be the one’s making decisions about how you’ll be cared for. To address these issues, you need to implement an estate planning tool that provides specific guidelines detailing exactly how you want your medical care to be managed during your incapacity, including critical end-of-life decisions. This is done using an estate planning vehicle known as a living will.
Bottom line: If you are single with no kids, you need to create an estate plan in order to name healthcare decisions-makers for yourself and provide instructions on how you want those decisions made should you ever become incapacitated and unable to make those decisions yourself.
3. Someone Will Get Power Over Your Finances
As with healthcare decisions, if you become incapacitated and haven’t legally named someone to handle your finances while you’re unable to do so, the court will pick someone for you. The way to avoid this is by granting someone you trust durable financial power of attorney.
A durable financial power of attorney is an estate planning vehicle that gives the person you choose the immediate authority to manage your financial, legal, and business affairs if you’re incapacitated. This agent will have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting your Social Security benefits, selling your home, as well as managing your banking and investment accounts.
Without a signed durable financial power of attorney, your family and friends will have to go to court to get access to your finances, which not only takes time, but it could lead to the mismanagement—and even the loss—of your assets should the court grant this authority to the wrong person. What’s more, the person you name doesn’t have to be a lawyer or financial professional; it can be anybody you choose, including both family and friends. The most important aspect of your choice is selecting someone who’s imminently trustworthy, since they will have nearly complete control over your finances while you remain incapacitated. And besides, when you work with us, your agent will have access to our team should they need guidance or help.
Don’t Leave So Much At Risk Given these potential risks and costs for yourself and those you care about, it would be foolhardy if you are single without kids to ignore or put off these basic estate planning strategies. Identifying the right estate planning tools is easy to do, and it begins with a Family Wealth Planning Session. During this session, we will consider everything you own and everyone you love, and guide you to make informed, educated, and empowered choices for yourself and your loved ones.
In the end, it will likely take just a few hours of your time to make certain that your assets, healthcare, and finances will be managed in the most effective and affordable manner possible in the event of your death or incapacity. Don’t leave your life and assets at risk or leave a mess for the people you love; contact us, to get your estate planning handled today.
This article is a service of Jennifer Winegardner of Rayboun Winegardner, PLLC. We do not just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love. That's why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session.