There is a common misconception that you don’t actually need an estate plan if you are unmarried or don’t have children. At Brian M. Douglas & Associates, we aren’t too sure where this idea could have come from. Estate planning is important whether or not you have a spouse or children. Although some parts of an estate plan may become less essential (like the guardianship provision in a will), the majority of a comprehensive estate plan is actually more important if you are single than if you are married.
We know that may seem like a pretty bold statement to make, but it’s true. Aside from providing for minor children, estate planning is actually more important for singles than it is for married couples. Here’s why: if you do not have an estate plan in place when you become ill, injured, or die, medical professionals and the courts will look to the default laws of the state (in our case, Georgia), to determine who is responsible for making decisions on your behalf. If you are married, chances are pretty good that a hospital or a court is going to take your marriage as a sign that you want your spouse appointed to represent your interests. If you are unmarried, however, the court or a medical facility will look elsewhere.
What Will Happen to Your Assets?
A will communicates to the State what you want done with your assets after you pass. No matter the size of your estate (whether you own a home, have extensive financial assets, collect antique watches), when you pass, these assets will need to go somewhere. Without a will, the probate court will make these decisions for you — who should inherit what, and who should receive the most out of your estate. Unfortunately, the Georgia laws of intestacy are not too creative. Your estate will likely end up passing in its entirety to your “next of kin,” likely your parents or your siblings. If you don’t have living parents or siblings, the order of successive relatives who may inherit are provided by the law, not by who you love, trust, and have relied upon throughout your life.
Similarly, the probate court will have to appoint a personal representative to oversee your estate without input from you. If you are single, choosing an executor may not seem like a big deal. However, consider who you would trust to pay your bills, file your taxes, and make sure that your old photograph albums make it into the right hands. The right executor may be obvious, or you may decide to appoint a professional, such as an attorney, to act as executor.
Depending on your estate planning goals and assets, you may decide to bypass the probate process altogether and create a trust. Trusts are endlessly customizable estate planning mechanisms that allow you to exercise more control over when, how, to whom, and for what purposes your assets are distributed. Trusts can be used to provide for a beloved pet’s care, to ensure you are taken care of in your retirement, to pass on property to friends and family, or even to support charitable causes.
Who Do You Trust with Your Most Important Decisions?
For those who are single, the most immediate estate planning need is to have documents in place that specify who can make financial and medical decisions on your behalf if you become incapacitated. The two main documents needed are a Power of Attorney and an Advance Medical Directive.
Power of Attorney names and grants specific legal powers to an individual you trust to handle your financial and legal affairs. Whomever you name in your Power of Attorney document will be able to step in and make financial and legal decisions on your behalf when you are unable to do so, whether your incapacity is temporary or permanent. Without a named Power of Attorney, a court could appoint someone you would not have chosen (perhaps a friend or relative you don’t trust with your important financial decisions) as your representative.
An Advance Medical Directive works in much the same way, except it is specific to healthcare decisions. An Advance Medical Directive can include the appointment of a healthcare proxy, who is empowered to make healthcare decisions on your behalf, if you are unable to do so. Again, if you fail to have a proxy named before the circumstances arise when you may need one, a family member that you would not have chosen may end up with these responsibilities.
Planning for the Possibility of Long Term Care
If you are in your 30s or 40s, retirement and the need for long term medical care may seem far off. However, the greatest asset you have now is the possibility of future earnings. If you become disabled or otherwise unable to work to your full potential, you need a plan in place. This is where things like disability insurance and some kind of long term care trust might come in handy.
If you are nearing or already in retirement, these matters may hit a little closer to home. You can create a trust that triggers when you, or individuals chosen by you, determine that you are unable to care for yourself any longer. At that point, a trustee can take over handling your financial and medical needs. Take into account who lives near you and who you trust to act in your best interest. Long term care may seem a long way off, but when it comes, you want to know that you are being cared for by those who you trust and who are familiar with your wishes.
Making Provisions for Charitable Causes
Very often, singles without children choose to incorporate their values and passions into their estate planning. This is a fantastic way to ensure that your assets are used to reflect your legacy and create an impact long after you’re gone. Depending on how you want to donate your assets, you can choose to establish a foundation, award scholarships, make a one-time donation, or even establish a donor-advised trust that can continue to make contributions over time.
Life Happens When You Least Expect It
Whenever we work with clients to prepare their estate plans, we hope that these documents and decisions won’t be put into action for a long time. However, it is true that life happens when you least expect it. Incapacity, illness, and death can occur at any time. That’s why it is so important to have a plan in place now. One of the great things about estate plans is that they can grow and adapt with you over time. Create an estate plan now to accommodate the life you live. Then, as your wealth grows, and your life changes, allow your estate plan to develop along with you. Give Brian M. Douglas & Associates a call to get started. Our office number is (770) 933-9009.