One may assume that only people who are married, have children or who are advanced in age need an estate plan, but that could not be any further from the truth. Everyone needs an estate plan, even those who are single and without children.
What Does an Estate Plan Include?
An estate plan includes much more than just a will. It is a set of documents that not only provide instructions in the event of a death but also in situations of incapacity.
An estate plan package includes a will, living will, power of attorney, healthcare power of attorney, and often a funeral planning declaration. All of these documents are vital to any individual, including those without dependents.
The Point of a Will
If one does not have a significant amount of assets, it may seem that a will is not needed. However, the point of a will is to make it easier for an individual’s loved ones to handle not only an individuals’ assets but also their liabilities after they die.
Even if that person does not own a home, they may own bank accounts, cars, various financial accounts, and more; and they may also have a significant amount of debt, including credit card debt and medical debt.
What happens to that debt when someone dies? It has to be paid. A will designates an individual who is in charge of essentially the “closing up” of an individual’s life. They will evaluate the deceased’s financial situation, pulling together everything they own and everything they owe and making sure that everything is addressed and divided appropriately.
It is not an easy task, by any means, so it is important to pick someone trustworthy to do this difficult job well. Otherwise, the person’s loved ones will have to scramble to determine who will handle everything.
They may not agree on how to close up the “estate,” and that leaves room for a lot of drama and conflict. Most people would rather they have the final say in how their lives are handled and choose to draw up an estate plan for this reason.
Power of Attorney and Healthcare Power of Attorney
Two other important documents are part of an estate plan: a power of attorney and healthcare power of attorney. No matter where someone is in life, these two documents are important.
A power of attorney allows for the appointment of one or more individuals who can make financial and legal decisions on someone’s behalf during their lifetime. These individuals can act if one is not able to do so either through unavailability or incapacity.
For example, if someone suffers from stroke and need nursing care, their power of attorney will be able to sign legal documents on their behalf.
Similarly, a healthcare power of attorney is an individual appointed to make important medical decisions on someone’s behalf. Should one be in the middle of surgery and not be able to make an important life-saving decision, this individual would speak on their behalf.
Not having this document leaves loved ones in a difficult position in determining who makes these decisions and what these decisions should be, especially if you are single.
A living will also dictates what an individual would want to have happen should they be in a position where they have no viable chance of living without the support of machines. Many people have strong opinions on this topic, not wanting to stay on life support if they have no chance of getting off life support.
However, not having this document ties the hands of hospital staff who have no choice but to keep the person alive at all costs. In fact, it is for this reason that most hospitals request a copy of an individual’s living will or healthcare directives before they are admitted or before they go into any kind of surgery.
These documents are needed at any age considering health issues do not happen to only individuals who are married, with children or are advanced in age.
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