Q: How is estate planning different for single people?
Very often, estate planning and retirement planning go hand-in-hand. Before your estate planning attorney can customize an estate plan for you, you’ll need to provide a clear picture of your finances – – including assets and liabilities. You also need to know how your property is held as that will impact how it can be transferred to someone else now or after you’re gone. Estate planning for singles can be different than planning for couples.
Particularly important estate planning issues for singles:
- Financial Power of Attorney
- Medical Power of Attorney/Health Care Proxy
- Last Will and Testament (“Will”)
Singles need a will to designate legal guardians for their minor children and to appoint trustees to manage their inheritance until they reach the age of 18 or higher. Single people also need a will to distribute probate assets (assets that need to pass through the probate court system before they can be distributed to beneficiaries).
Very often, married couples hold property jointly in a manner that not only offers protection from creditors but automatically transfers the property to the surviving spouse upon the first spouse’s death. Common examples of this include jointly-held bank accounts and real estate where the spouses took the title as husband and wife.
But for single people, their assets which are not jointly-held must be specifically bequeathed to somebody in a will or a trust– or in the case of non-probate assets–then by the designation of beneficiary forms. Life insurance and certain pension/retirement accounts are examples of non-probate assets which, as the term implies, are assets that transfer to the designated beneficiary directly– without the need of going through the probate court process– upon showing proof of death.
Planning for disability
Comprehensive estate plans not only plan for death; they also plan for disability. It’s important that every adult has a will as well as powers of attorney and other disability planning documents. Powers of attorney are legal documents that allow the maker to appoint a trusted person to take care of their financial affairs (i.e., pay the bills, etc.) in the event they become incapable of doing it themselves as a result of a severe illness or injury. There are also medical powers of attorney, also known as healthcare proxies, that allow the designated agent to make healthcare decisions on the maker’s behalf if they become incapacitated and unable to make their own decisions. Living wills allow the maker to list the medical treatments they would or would not want if they became terminally ill and unable to make their own health care decisions. Some of the items addressed include life support, do not resuscitate orders, hydration or feeding tubes, pain medication, and organ donations. Finally, a HIPAA authorization is a document that allows the release of your medical information to the person you designate.
Retirement planners frequently consider disability insurance to be mandatory for singles since they are the sole breadwinners and don’t have a spouse contributing additional income to their household.
If you need assistance with an original estate plan or would like to modify an existing one, the estate planning experts at Merlino & Gonzalez can help you. Contact us today to schedule a consultation.
From our offices in Staten Island, New York, and East Brunswick, New Jersey, we represent clients in both states in all aspects of estate planning and estate administration.