Vice President, Education, WealthCounsel
These days, 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 folks, as highlighted in a recent Wall Street Journal article. Single people face unique estate planning issues that require advanced planning, time and the help of an experienced professional.
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 a will and/or an irrevocable trust 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 state-appointed strangers.
Single people should sign a general power of attorney, an advance health care directive, and a HIPAA authorization allowing a loved one 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.
Previously married or widowed singles should reevaluate all of their beneficiary designations to ensure accounts won’t be given to former spouses if that’s against their wishes.
Those are just a few of the ways estate planning can be complicated for singles. It’s wise for single people to contact an estate planning professional as soon as possible, in order to make sure all their bases are covered and their assets are distributed according to their wishes.