Many people believe that if they are single, they don’t need a will or other estate planning documents. But estate planning is just as important for single people as it is for couples and families.
Estate planning allows you to ensure that your property will go to the people you want, in the way you want, and when you want. If you do not have an estate plan, the state will decide who gets your property and who will make decisions for you should you become incapacitated, and these aren’t necessarily the choices you would have wanted. An estate plan can also help you save on estate taxes and on court costs for your loved ones.
The most basic estate planning document is a will. If you do not have a will directing who will inherit your assets, your estate will be distributed according to state law. If you are single, most states provide that your estate will go to your children or to other living relatives if you don’t have children. In the rare case that you have absolutely no living relatives, your estate will go to the state. In one case, a bachelor thought he had no family members, but his substantial estate was the subject of a tedious lawsuit. The result? Miniscule shares went to people who’d never heard of the decedent, so called “laughing heirs.” Without a will, he had no way of directing his property to charities (or friends) whom he probably wished to benefit.
At least equally important is a durable power of attorney. A will speaks after you die. What if you lose the ability to speak now? Who can access your finances, accounts, real estate, etc? A power of attorney allows a person you appoint — your “agent” — to act in your place for financial purposes if and when you ever become incapacitated. In that case, the person you choose will be able to step in and take care of your financial affairs. Without one, only a court can appoint a conservator to take care of your financial affairs while you are alive. That court process takes time, is intrusive, costs money, and is quite public. Besides, the judge may not choose the person you would prefer.
Similarly you should have a health care power of attorney, often called a “health care proxy” or an advance medical directive. You appoint whom you want to act as your agent if you lose capacity to give health care providers instructions. While many states have implied surrogates for health care decision making, you might not like whom the state would appoint for you. If you are like many families, you may have a personal or family history of mental illness (often dementia.) Many states allow for a “protest” or “psychiatric” directive to allow your agent to make decisions even when you object when the doctor certifies the objection is due to mental illness.
If you are planning to give away a lot of your money, there are ways to do that efficiently through the annual gift tax exclusion and charitable remainder trusts. Other estate planning documents to consider are a revocable living trust and a living will.
It’s critical for singles with significant others to have an estate plan in place that touches upon these matters. Without careful attention, unmarried couples and other “nearly family” arrangements won’t be honored when end-of-life decisions and inheritance rights come into the picture.
So, don’t think that because you are single, you don’t need an estate plan. Contact your attorney to find out what estate planning documents you need to assure your wishes will be carried out and those you care about will be protected.
*This article is provided for persons interested in elder law issues in Virginia and across the United States. This article has been written by a practitioner in the field of elder law, but unless otherwise noted, the writer is not affiliated with ThompsonMcMullan, P.C. Nothing in the newsletter or the articles is, or is intended to be, legal advice or a substitute for legal advice. If you need legal advice of any kind, please consult an attorney with experience in that area of the law, whether in our firm, or otherwise.