Estate Planning for Singles

Widowed, Divorced, Never Married

Estate planning can seem fairly simple when you have a clear idea of who your beneficiaries and representatives will be, but what if you don’t? Most people choose close family members, such as their spouse or their children, to be the recipients of their estate and the decision-makers in the event of their death, but not everyone has that option.

There can be a number of reasons to have no immediate or obvious beneficiaries. Perhaps you never married or recently became widowed or divorced. Maybe you decided not to have children, or just haven’t had them yet. Many people are marrying and having children later in life, but that doesn’t mean you should wait to create your estate plans.

Estate planning when you are single, or have no beneficiaries, can be more important than estate planning as a married individual with children. Find out why, and what your estate planning options are as a single person, in this article.

What Happens if I Die Intestate?

Even if you are single, and don’t have any close relatives that you would like to leave your estate to, chances are that you have someone, such as a partner, friend, or even a charity, who you would like to leave something of yours to. If you die without a Last Will, and don’t name a beneficiary at all, the state has to find your next closest relative and they receive any and all benefits of your estate.
The hierarchy for receiving assets when there is no named beneficiary is as follows:
  • Your spouse
  • Your children, or, if they are not alive, your grandchildren
  • Your parents
  • Your siblings, or if they have passed away, your nieces/nephews
  • Your grandparents, and if they have passed away, your aunts and/or uncles
  • Any children of your deceased spouse
  • Any relatives of your deceased spouse
  • Your state of legal residence
If you don’t leave behind estate plans, your assets will be distributed to your next surviving heir, but depending on your family situation, that could be someone that you don’t even know, or someone that you do not wish your estate be left to.
Instead of having your state decide who your assets go to, consider leaving your estate to:
  • Your partner
  • A close friend
  • A charity or other organization
  • A scholarship or educational institution
  • In a trust to care for a minor or a pet
  • A sibling
  • A business partner

What’s the difference between an ’heir’ and a ’beneficiary’? An heir is generally a blood relative. When you don’t have a Last Will, your estate is given to your next surviving heir. A beneficiary is someone who you name in your Last Will to receive all or part of your estate. It can be anyone that you choose.

To designate who you would like to receive a portion of, or all of your assets, you must create a valid Last Will and Testament that names each party as a beneficiary and lists what you would like them to have. Generally speaking, this is someone that means something to you who you would want to benefit from your estate after you pass away. Without naming a beneficiary or recipient, your assets could be left to a distant relative or someone you may not even know.
You will also need to select an executor to enforce the wishes listed in your Last Will. This could be the same person that you choose as a beneficiary, or someone else. You can also choose to have a professional represent you, such as a lawyer or a trust company.

What if I Don't Have a Personal Health Care Agent?

If you are single, and have not named a health care representative or indicated your wishes in a Medical Power of Attorney or a Health Care Directive, you have no control over who will represent you if you become temporarily, or permanently incapacitated.
If the state cannot find a family member to represent you and decisions need to be made regarding your physical health, they will look for an heir to act on your behalf. This means that someone who may not understand or share your personal preferences will be making decisions such as whether or not you should receive artificial sustenance or become an organ donor.
That’s why it is important to choose someone, even a close friend, or a professional representative, such as a lawyer, or even a family doctor, if they’re willing, to make decisions on your behalf. This is especially relevant for people who have strong feelings about resuscitation or other procedures, or for people who have minor children.
Ready to name a Health Care Agent?

I Have a Partner, but We're Not Married

In a legal marriage, when you die intestate, your spouse and any children will generally inherit your assets. When you have a partner but are not legally married, the state can disregard them completely if you pass away. This means that if you die without listing your partner as a beneficiary in your estate plans, your assets could be passed on to your next existing heir instead of to your loved one.
You and your partner may have spent many years together, and even had children and shared finances, but unless you are married, your partner could be left with nothing when you die. Any children that you have will inherit your estate, leaving your loved one in a potentially negative financial situation.
The same is true for people who are in legal common-law relationships. Even though you may be in a legal relationship, you do not have the same rights as married couples. Common-law marriage is only recognized in a limited number of states, so if you die intestate, your common-law partner may receive nothing, while your heir benefits from your estate instead.

I am Single With Children

For single people with children, estate planning is essential. Without any preparations, if an accident happens, your child or children could be left without a guardian, or in the care of someone you may not have chosen.
If your ex-partner is still alive, but has no custody rights, it is possible that custody could still revert back to them if you pass away. A Last Will can’t override parental rights, but you can name someone who you would want to care for your child, and include a letter to explain why. It will be up to the court to decide what is in the best interests of the child, but the stated intention in your Will may play a large role in their decision.
However, if there is no second parent because they passed away or if you decided to have a child on your own, you will need to name a guardian to care for your child after you pass away. The guardian should be someone who the child knows, and who you trust to care for your child as a parent would.
You can set up a trust to see to the financial welfare of your child over the course of their lifetime. In naming a trust, you will have to choose a trustee, who can either be your executor, a beneficiary, or someone else entirely.
Alternatively, if you currently pay child support, you should speak to a lawyer to find out what, if any, obligations will be passed down to your estate if you pass away.

I am a Single Business Owner

Estate planning is important for everyone all around, but it can be especially important to business owners. Choosing who you want to inherit your business, and determining what restrictions you would like to lay on your beneficiaries, if any, is a lot of work. But, if you’re a young entrepreneur, with no spouse, or children, or if you are widowed or divorced, this can make your estate plans a little more difficult.
Single entrepreneurs and business owners still need to choose someone to inherit their business and their assets, but without any immediate options, their choices are limited. Do you want your shares to be left to a partner, a loved one, or in a trust for a minor?
There are many young solopreneurs with thriving businesses, which means that they have significant assets. Even though you may not have a spouse or children yet, you probably still want to control what will happen to your assets, since you were the one who put time and effort into building your company.
Create a plan now, in case of an accident or emergency, and alter it as your life changes if you need to.

How do I Start Estate Planning?

The first step in estate planning is to decide who will represent you in different situations, and who will receive benefits from your estate. You should consider who you will name as:
  • An executor in your Last Will and Testament. This person will enforce the decisions made in your Will, as well as see to the closing of your estate once you have passed away. You may also have co-executors if you wish to have more than one person represent you.
  • A personal representative in your Health Care Directive/Medical Power of Attorney. This person will either enforce decisions that you have made in regards to your personal health care, or they will have the right to make decisions on your behalf, should you become unable to make them for yourself.
  • Beneficiaries. These are the people or organizations that will receive the benefits of your estate.
  • An attorney-in-fact. This is the person who will have the right to make decisions on your behalf if you are away due to travel, or you become incapacitated. You may name one to manage all of your affairs, or co-attorneys-in-fact if you have more than one person who you would like to represent you.
  • A guardian for any minor children or pets. This individual will be responsible for the mental, physical, and emotional well-being of your child or pet if you pass away.
  • A trustee if you are setting up a trust. Generally, this person will manage financial affairs on behalf of a minor until they are old enough to inherit.
You may choose to either enlist friends or family members as your representatives, or a professional. Who you choose for each role is important, as you need to be certain that they will be able to handle the responsibilities required of them, as well as the different tasks that they will need to perform as part of their duties.
After choosing the various parties in your estate plans, and informing them of your decisions, the second step is to create a written record of your wishes.
Although which documents you will need depends heavily upon what your estate plans are, and how you would like them administered, there are a few documents that you will need regardless of your situation. These include:

The Importance of Estate Planning

No matter what your relationship status is, by creating a Last Will, Health Care Directive, and Power of Attorney, you can ensure that your wishes are respected and that anyone you leave behind is taken into account when your estate is divided.
Think of it not only as a way to protect yourself and your preferences, but as a tool to help you protect your loved ones and the things that are important to you. Having your affairs in order can help you to ensure that everything you worked so hard for is distributed to the people, charities, and organizations that mean the most to you.
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