If you are single, you may not think you need to plan your estate, but single people are in as much need of a plan as anyone else. Estate planning not only involves determining where your assets will go when you die -- it also helps you plan for what will happen should you become incapacitated, perhaps as the result of a stroke, dementia, or injury. If you don't make a plan, you will have no say in what happens to you or your assets.
Without a properly executed will in place when you die, your estate will
be distributed according to state law. If you are single, most states
provide that your estate will go to your children, parents, or other living
relatives. If you have absolutely no living relatives, then your estate
will go to the state. This may not be what you want to have happen to
your assets. You may have charities, close friends, or particular relatives
that you want to provide for after your death.
If you become incapacitated without any planning, a court will have to
determine who will have the authority to handle your finances and make
health care decisions for you. The court may not choose the person you
would have chosen. In addition, going to court to set up a guardianship
is time-consuming and expensive. With proper planning, you can execute
a power of attorney and a health care proxy, which gives the people you
choose the authority to act on your behalf, as well as an advance directive
giving instructions on what type of care you would like. The power of
attorney can also dictate exactly what powers the individual has.
Single individuals who are divorced need to make especially certain that
the beneficiary designations on their IRAs, life insurance policies, and
relevant bank accounts are up to date. If you don't, your ex-spouse
could get the funds. And for single people of means, opportunities to
avoid state or federal estate taxes can be more limited than for married
couples, although advance planning can close the gap.
In short, proper planning is a good idea for everyone. Contact your attorney
to help you create an estate plan.