Estate Planning Strategies for Singles

Planning

If you’re single with no kids and approaching retirement, you probably have not thought of estate planning. You may have been actively engaged in building your career, saving money, and spending your time off during weekends on exotic vacations. 

As you inch closer to retirement, it is time to seriously think about your estate plan. The following strategies will help shed some light on what your estate planning should look like.

Execute a Power of Attorney and a Health Care Proxy

This includes documents that are used while you’re still living. It will enable you to select who is responsible for making important medical and financial decisions for you if you are not in a position to make them for yourself. Because you’re single, you need to make sure that you have identified an individual you can trust to make these decisions for you.

It is possible to have more than one attorney for different types of decisions. One individual can be designated as responsible for decisions unrelated to medical care while the other can make decisions concerning your medical treatment.

When you’re dead, the power of attorney and health care proxy is no longer valid. Therefore, you’re required to come up with a will and trust.

Make a Will

This is where you name an individual as an executor of your estate. The named individual will attend to your affairs after you’re dead. Probate your will if necessary and pay income as well as estate taxes. The beneficiary of your will should be a revocable trust that you create during your lifetime.

Create a Revocable Trust

Name a beneficiary who benefits under your revocable trust. While you’re alive, you must be the primary beneficiary. You may want to provide benefits for your significant other, especially if you live together and you’re the primary income earner.

You need to state the name of the beneficiaries who will receive the assets after you die. Perhaps you may want to establish an income string for your significant other, or you may want to provide him or her a place to live with the assets passing to nephews and nieces on his or her death.

If the nephews or nieces are young, consider holding any assets for them in a trust until they are old enough to handle the money themselves. You can be the trustee of your estate while still alive. You are also required to name a successor trustee to help manage the trust assets if you cannot manage them on your own. The successor trustee will play an important role whenever you’re not in a position to perform your duties. As a single individual, naming someone to manage your assets is a critical component of your planning. 

Fund the Trust Now

This step is very important because when you fund your trust in your lifetime and you are incapacitated later, the successor trustee will be in a position to utilize the funds for your care. Without it, those close to you may have to petition the local probate court to have a conservator or guardian appointed. That is a time-consuming and costly endeavor and will leave the decision of who will be in charge of your estate at the mercy of a probate court judge.

Funding your trust now can help you control the decision as to who will manage your assets. An added advantage is that you will also avoid probate.

Consider Estate Taxes

Many singles do not mind if their beneficiaries receive less while the government receives more. After all, the beneficiaries are receiving a windfall therefore a few extra dollars of taxes will not matter, but if you care, there are other planning options you can consider. For example, you may want to look for a charitable institution that has played an important role in your life. Or you may opt to offer lifetime gifts to friends and family. Individuals consider getting married to take advantage of the increased estate tax savings that couples have. If that is the main reason for marriage, it is not advisable at all. 

Final Thoughts 

Single individuals without kids always think they will live forever. They have no children to push them towards their mortality. If you are such a single person with no estate plan, do not wait until the last minute. Deathbed planning is not enticing, and neither is becoming sick or incapacitated. Not having named the right individuals to care for you and your assets can be demoralizing. Establish a plan in place to help take care of yourself now while you’re the decision-maker.

Even if your estate is relatively small, it can be settled more quickly and efficiently if you have a signed valid will in place. Because no one knows what the future may bring, it makes sense to play with the possibility of future incapacity and establish a power of attorney and healthcare proxy.

Also Read: How To Wear Camo Pants Without Looking like Youre From 1991.

By Flavia Calina

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