Single? Estate Planning Is Still Key
If you're single and don't have any close relatives, whom will you leave your estate to? A close friend or a charity? If you die without a last will, and don't name a beneficiary, the state has to find your closest relative so that he or she can receive all the proceeds of your estate. That may not be what you want.
Without instructions to the contrary, this list shows the typical priority of your family members and others to your estate when it is divided:
- Children of a deceased spouse
- Any relatives of a deceased spouse
- Your state of legal residence
Instead of having your state decide whom your assets go to, consider leaving your estate to:
- A close friend
- A charity or other organization
- A scholarship or educational institution
- A trust to care for a minor or a pet
- A sibling
- A business partner
Do I Need a Will if I'm Single?
If you have a positive net worth, you should create a valid last will and testament. If you don't name a beneficiary, your assets could be given to someone you may not even know. It's normal to choose people who mean something to you and who can benefit from your estate after you pass away.
There are also various trusts you can set up, some of which are especially good at transferring money to charities.
Incapacity Planning for Single Planners
As a single person, you may not have named a health care representative or indicated your wishes in a medical power of attorney or a health care directive. Without these, you'll 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, then someone will be making these decisions regarding your physical health, so everyone will be looking for an heir to act on your behalf. Thus, someone who may not understand or share your personal preferences will be making decisions about whether you will receive artificial sustenance or will become an organ donor.
Choose someone — a close friend, a professional representative, a lawyer or even a family doctor. You need someone who you would feel comfortable with making decisions on your behalf. If you have strong feelings about resuscitation or other procedures, you need to make these known so your wishes are followed.
Inheritance of Your Business When Single
If you are a single business owner, you'll want to consider who will inherit your business and determine what restrictions you would like to impose on your beneficiaries. If you're an entrepreneur with no spouse or children, if you're widowed or divorced, estate planning can be a little more difficult. Do you want your shares to be left to a business partner or another loved one, or held in trust for a minor?
Ensure that your wishes are respected and that anyone you leave behind is taken into account when your estate is divided. You are protecting yourself and your preferences with your estate plan, using it as a tool to help you protect your loved ones and the things that are important to you.