I’ve been thinking about singles’ estate plans because I recently came across three statistics.
- Singles don’t live as long as married folks.
- Most Americans die without a will.
- Winter months are the ones with the greatest chance of death.
With winter nearly in the rear view mirror and knowing you have at least another year (statistically!) to live, why not get your estate in order. As a single, you have substantial discretion on how to arrange your affairs in a way that respects your values.
These documents will govern control of your assets and health care if you were to pass or to be incapacitated. A set of documents cost anywhere between $2,000 to $3,000.
Singles’ Estate Plan Documents
Four key documents form the basis of your estate plan. They are usually sufficient for singles to ensure their wishes are heeded for their health care and belongings when they are unable to do so.
Last will and testament: This document provides instructions on how to distribute your assets and personal property upon death.
Your assets will be distributed according to your state’s probate law if you don’t have a will. If you are single, first priority generally goes to your parents and, if they are deceased, to your brothers and sisters.
Durable Power of Attorney: A durable power of attorney (POA) enables you to appoint an agent to handle specific legal and financial responsibilities. The POA is temporary in nature. It lasts for as long as a temporary incapacitation.
Advanced Medical Directive: An advanced directive contains your wishes concerning medical treatments at the end of life. If you are in an end of life situation as a result of an accident or debilitating disease, your directions will be honored for how medical care will be provided.
Durable Power of Attorney for Health Care: A medical power of attorney (or healthcare proxy) allows you to name a person you trust as your healthcare agent. Your healthcare proxy is authorized to make medical decisions on your behalf if you are temporarily unable to do so. If you regain the ability to make decisions, the healthcare proxy cannot continue to act on your behalf. In other word, the power ends. This power is different from the advanced medical directive in that it ends when you regain decision-making ability.
A fifth document is a revocable living trust. You transfer the title of all of your assets (car, home, bank accounts, investment accounts, etc) to a trust. You are the trustee during life. You appoint someone to be the trustee upon your death.
The benefit of a trust is that you avoid probate and publicity when you pass. Your estate can therefore be closed relatively quickly. A trust, however, be a pain to establish and transfer your assets into it.
Tip 1: Identify the Same Person for the Will’s Executor and Power of Attorney
Consider asking the same person to be the executor of your estate and your agent in the POA document. Often the issues are the same and it makes some sense for someone to know how you have set up your assets and plans. No need to keep them secret.
Often singles may not be living at their family home and have no relatives in the vicinity. If this is your situation, give some thought to naming a trusted friend or relative that is local.
Tip 2: Grant Executor and Agent Access to Your Digital Assets
More and more folks have a substantial number digital assets. Digital assets include social media, email, bills and utilities, file sharing accounts and the like. Our lives are no longer on paper but in the cloud. And each account has a variation on one password!
Make a thorough list of your digital assets. Keep them in a secure spot for your executor or agent. You don’t need to include the accounts in your will, but make sure your intentions regarding them are clear.
Consider whether your want your social media accounts deleted or memorialized upon your passing. These are important issues and you may want to make sure your executor / agent to know your preferences.
Tip 3: List Beneficiaries on Retirement and Bank Accounts
If you don’t have a complicated estate, you may be able to avoid use of a will by designating beneficiaries on your retirement assets such as your 401k or IRAs. Even if you have a will, assets with a beneficiary designation do not go through the probate process. The designee can provide proof of death and their identification to obtain the assets.
Likewise, payable on death (or transfer on death) designations on your savings accounts and investment accounts. The designee doesn’t have to wait until the will is probated to obtain the funds in the accounts. These are a quick way to pass assets to heirs without a lot of fuss.
Tip 4: Consider Someone with Sound Medical Judgment for Your Healthcare Proxy
Often health care issues require sound judgment from someone with sufficient time to do so. Relatives or close friends who are geographically close by maybe the right choice. Often, this is not the same person as your executor or agent. This person should understand your wishes regarding your care so that he/she can act confidently knowing your intentions.
Some of the best conversations can be with close friends and relatives about these decisions. They reveal your thoughts and values in a very concrete way.
In sum, use these tips to get your estate documents and plans in order. As singles, you have substantial discretion on these issues. It is best to take care of them so that your intentions are followed when the need arises.