Single? Estate planning is still essential.
More people are living single than ever before. In 1970, just about one-third of Americans 15 and older were single, according to U.S. census data. Today, that number’s closer to 50 percent.
Whether never married, divorced or widowed, singles need to pay just as much attention to their estate planning as married couples. Singles face unique estate planning issues that require consideration and planning.
Some of the most complicated estate planning issues for singles include:
Heirs: 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 or 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’d prefer, single people should create an estate plan that specifically states how they’d like their assets to be distributed.
Decision makers: A health event or other incident could leave any of us incapacitated. For single people, it’s important to designate a trusted loved one or friend to manage assets and health care decisions in case of an emergency. Without proper directives, those decisions could fall to distant relatives or court-appointed strangers. Single people should sign a general power of attorney, healthcare power of attorney, an advance healthcare directive called a living will, and a HIPAA authorization—all as part of a plan to empower a loved one or friend of choice to make financial and medical decisions on their behalf.
Beneficiaries: Certain accounts, like retirement plans, require account holders to designate a beneficiary when they enroll. That beneficiary designation is typically upheld when the account holder dies, even if he or she gave the account to someone else in a will. It is important for singles to review beneficiary designations to ensure assets are distributed to those individuals or charities of choice and in the shares and manner desired.