If you are single and don’t have a lot of assets, why do you need to establish a will? Anyone can benefit from having a will, but single individuals often need assistance to understand the potential impact it can have on their assets and future health.
As a single or unmarried individual, when you pass away, you may not have any children to inherit your assets. Without a will (intestacy), the court will determine the distribution of your assets and to whom.
They will start distributing to the closest family members and then reach out to more distant relatives. Whether your favorite cousin or nephew is interested in the value of specific items or has an emotional attachment to certain belongings is not a matter of importance.
Having a will allows your assets to go where you want them to. It expresses your wishes regarding your property, informing the court of your intentions. If you do not want certain individuals to receive any of your assets, FindLaw’s website points out that you can disinherit them in your will.
The document also enables faster processing of your assets through probate, which your beneficiaries will appreciate. A will can also designate your personal representative or executor to distribute assets after probate approval.
If you wish to donate to charitable organizations or religious groups after your passing, a will can specify the amount of donation and which organization to donate to. Donations can also help reduce the taxes owed by your estate. In 2024, you can gift up to $18,000 annually per person in the form of individual gifts.
FindLaw mentions that if you do not have a will, the probate court will not directly transfer any of your assets to charitable organizations.
When it comes to children, a will allows you to designate a guardian. PNC states that if certain conditions are met, living parents have the first choice. A will also permits you to set aside funds for their care.
Creating a trust for your children gives you greater control and protection over the assets you leave for them. This becomes even more crucial if your children have special needs.
PNC notes that a cohabitating spouse may not inherit any assets from the deceased partner. Furthermore, terminating your relationship with stepchildren could result in losing visitation rights. According to LawDepot, the court distributes assets in a specified order, starting with the spouse, followed by children or grandchildren, parents, etc. With a will, you can specify who you want your assets to go to.
If you may lose capacity to make decisions for yourself and do not want to entrust your medical care to anyone, a healthcare proxy appoints a trusted individual to make medical decisions on your behalf when you are unable to. These documents, along with your advance directives, guide healthcare professionals and agents to make medical decisions concerning your care based on your provided instructions. It is essential to communicate your wishes in advance to ensure they understand your desires if you cannot advocate for yourself.
When you are unable to make decisions for yourself, having someone with power of attorney can act on your behalf legally. Choosing someone you trust, who will handle your financial affairs after you lose capacity. Their authority over your finances ceases upon your death.
It is not advisable to grant the same person your health and financial powers of attorney. This power distribution becomes even more critical if you have substantial wealth. Additionally, the agent should be someone other than those who will benefit from your assets after you pass away.
Whenever you need someone to make healthcare or financial decisions for you, you can provide a power of attorney. According to Investopedia, if you wish for the power of attorney to remain effective after you lose capacity, a durable power of attorney needs to be signed. Without a durable power of attorney attached when you lose capacity, a standard power of attorney becomes void.
Estate planning is essential for single, widowed, or divorced women. The income of most women tends to be lower than men. This could be due to seasons when they are unable to work (such as pregnancy or as caregivers) and their longer life expectancy compared to men.
Regardless of income, estate planning is necessary to ensure women have enough income in retirement. Being single means paying higher taxes on income, but there are ways to reduce your estate and taxes while you are alive.
One way to minimize taxes and provide more resources for your beneficiaries is by creating an irrevocable trust. Assets placed in a trust are excluded from probate court, resulting in a quicker distribution. Since the assets are not under your control, they are not considered part of your estate.
Accounts with designated beneficiaries (rather than part of the estate) bypass probate court. They are also distributed swiftly. This includes savings accounts, CDs, and more. Keep these accounts’ specified beneficiaries updated timely, as the money in them goes to the named individual regardless of your intentions.
Estate planning for single individuals is more than just convenience; it is the best way to pass on your assets with minimal hassle. Consult an estate attorney or financial advisor to understand the best ways to transfer assets and reduce estate taxes.
The original article “Do Singles Need Estate Planning?” was published on the English version of The Epoch Times website.
© 2024 The Epoch Times. All rights reserved. This article reflects the author’s views and opinions for general informational purposes only, with no intention of recommending or soliciting. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or other personal financial advice. The Epoch Times does not guarantee the accuracy or timeliness of the content.