Most estate planning advice you’ll find on the internet speaks to those individuals who are married and have a spouse and/or children to whom they plan to leave their estate. However, many individuals are now marrying later in life, opting not to remarry after a divorce, or never marrying at all — and their estate planning needs, while unique, are no less important.
Those who are unmarried might require a different approach to estate planning than their married counterparts. Here are six estate planning tips for singles.
1. Prepare powers of attorney
An important part of estate planning is ensuring you designate a person who can take care of your financial and medical needs if you cannot do so yourself. This person can be any family member, friend, or individual whom you trust enough to handle your affairs. You can appoint someone as your agent (called an attorney-in-fact) to manage financial or medical decisions for you using a power of attorney (POA) document. These are typically separate documents, with the financial POA being known as a Durable General Power of Attorney and the medical POA being known as a Durable Medical Power of Attorney (with Living Will provisions) or an Advance Medical Directive. Naming someone you can trust to properly manage each type of decision-making role for you is absolutely key, so make sure you choose wisely.
2. Plan for long-term care insurance
Long-term care insurance should be a top priority for both married and unmarried individuals. Very few individuals learn until it’s too late that Medicare does not provide coverage for long-term care beyond the first 90-days of rehabilitation services, and you can’t qualify for Medicaid unless you have less than $2,000 in assets in your name.
Long-term care insurance provides a form of added protection should your health care needs required 24-7 nursing care (in home or at a private long-term care facility) should you find your health compromised by a long-term illness (such as dementia, Parkinson’s, or Alzheimer’s disease). An unmarried person is not able to qualify to exempt more critical assets he or she may own, as compared to a married person, when it does come to applying for federal or state benefits. Therefore, it can be even more important that a single person take steps to obtain a long-term care policy and mitigate the loss of a lifetime spent saving for retirement only to have to spend every cent on such long-term care.
3. Learn all your options (a Will alone is not always best)
If you want your wishes to be carried out properly after you die, it’s best to understand the best tools available to accomplish those goals. This may be a Trust, a Will, and designation of beneficiaries on one’s financial accounts. A Will is just one tool (and not always the best one) that you can use to specify which relatives or friends (or even your pets) you wish to inherit your assets. Small or large, understanding how to use the tools available to you can ensure significant savings from legal fees, probate fees, or more. Virginia law, once you learn more about it, offers many ways to completely avoid probate, not just of your money or belongings, but, also your home.
4. Appreciate the difference between an agent and an executor
Powers of attorney are put in place for periods in life when you cannot manage your own financial or medical affairs; however, once you die, they die with you. This means the next person in charge of your assets will be your executor. Choose a trusted executor who will make sure to properly pay any final debts and expenses, know when to ask for help if they need it, and fulfill the remaining wishes you have set forth in your estate plan for any beneficiaries you name. It may be prudent to speak to the person(s) you select first, to ensure they are willing to serve in the role; and, it does not need to be a spouse or relative. An unmarried person may choose anyone they like, even a close friend, CPA, lawyer, or otherwise to serve as his or her executor.
5. Consider using a revocable living trust
A revocable trust can be a very flexible way to take care of other loved ones after your death even when you’re single, including nieces, nephews, or a family pet. You can serve as your own trustee during your lifetime. You can name a friend or family member to succeed you should you become too ill to serve or die. And, you can modify (amend) the Trust as needed over the course of your lifetime. You are the beneficiary of your Trust for your lifetime, which means if you do lose the capacity to manage your affairs, you have a trusted person who steps in to succeed you and who can use your Trust to protect your assets and make sure they are properly managed and spent for your needs until your death.
If you have children from a former marriage, you can also use the Trust as a way to provide for their needs during your lifetime, or leave them a home to live in (paid for by the Trust) after your death until they reach an age you select for the home to otherwise be sold. Have pets you love like children? A revocable trust can ensure they go to a good home while also being financially provided for during their lifetimes. Lastly, a revocable living trust allows you avoid the probate as assets held by or passing to your Trust at your death (meaning you named your Trust as a pay-on-death beneficiary) will not have to be reported to the court and cause needless additional legal costs and delays to reach your intended beneficiaries after you die.
6. Get help from an experienced estate planning attorney
Whether you’re single for now or never planning to marry (or remarry), the Law Office of Patricia E. Tichenor can help you with your estate planning needs. We’ve been serving Virginia residents for more than 20 years and can advise you on the best estate planning tools for your current assets and needs. Contact us to schedule your complimentary consultation today.