It's a common misconception among single individuals that estate planning is only necessary for those with families. Regardless of age or life stage, estate planning is equally vital for singles.
I commonly hear from single people that they don't need to put together an estate plan because they don't have anyone to leave their estate. This is the furthest thing from the truth, and not having an estate plan can have devastating consequences. Two of the most challenging conversations I have had with clients involved the death of a single person without children.
The first involved a do-it-yourself-will that the client thought would be adequate but was not correctly executed. As such, because the individual died without a spouse or children, Florida's intestacy statute dictated that his estate would pass to his parents. Unfortunately, his mother was in a long-term assisted living facility and receiving Medicaid benefits. This situation became very expensive for the family and required extensive and costly Medicaid planning techniques to avoid the government receiving everything.
The second situation was similar but also very different and challenging in other ways. Fortunately, we were able to address the problem before this client passed away; however, if she had left things up to the intestacy statute, her entire estate would have passed to her biological father, with whom she never had a relationship. Without intentional estate planning, these situations can and do happen.
In this blog post, we'll explore why single people with no children need an estate plan and five essential aspects of estate planning that can significantly benefit them.
1. Asset Distribution According to Your Wishes:
One critical function of Estate planning is ensuring that your assets are distributed as per your preferences, even if you don't have a spouse or children. Without a well-crafted estate plan, your estate could end up in the hands of distant relatives or the state rather than going to the people or causes that matter to you.
2. Choosing Your Beneficiaries
Estate planning empowers you to designate who should inherit your assets. Whether it's friends, close relatives, or charitable organizations, you can shape the legacy you leave behind, supporting the people or causes that hold significance in your life.
3. Avoiding Intestacy Laws
Passing away without a valid will or estate plan can lead to complications under intestacy laws, which can vary by state. These laws may not align with your preferences, potentially causing disputes and difficulties.
Florida Statute Sections 732.101–.109 outlines the process in Florida:
- If there’s a valid marriage to a surviving spouse, that individual receives everything. However, if there are children from a previous marriage, the estate would be divided between them and the surviving spouse.
- If there’s no spouse, biological or legally-adopted children become the prime beneficiaries. Stepchildren aren’t eligible. If a child dies before their parent, then a grandchild may inherit a portion of the estate.
- Without a spouse or children, the decedent’s parents are next in line to inherit the estate.
- Finally, if these heirs aren’t alive, the deceased’s siblings or other closest relatives are entitled to the estate.
With an estate plan in place, you retain control over your asset distribution, ensuring it adheres to your wishes.
4. Incapacity Planning
Estate planning isn't solely about after-death arrangements; it also covers your financial well-being during your lifetime. For single individuals, a revocable living trust is a versatile and reliable tool for incapacity planning. Additionally, a durable power of attorney designates someone to make financial decisions on your behalf if you become incapacitated, providing crucial support during challenging times.
5. Healthcare Decisions
In a medical emergency or incapacity, a healthcare directive or living will play a vital role in estate planning. Single individuals should appoint a trusted person to make healthcare decisions on their behalf when they cannot. Additionally, every single person should designate someone to serve as their Health Care Surrogate. This ensures that medical choices align with their values and beliefs, providing peace of mind.
Estate planning is not exclusive to married couples or those with children; it is equally critical for single individuals. By taking proactive steps to create an estate plan, you take control of your financial and personal affairs, ensuring that your legacy reflects your values and aspirations and isn't left to chance. Consult with a qualified Tallahassee Estate Planning attorney to help tailor a plan that suits your unique needs and provides peace of mind for yourself and your loved ones.
