People put off estate planning for a variety of reasons. What propels a lot of people into the estate planning attorney’s office is a change in their family status—a marriage or the birth of a child. But what if you’re not married, and have no children? Lawyers often say, “everyone needs an estate plan,” but is that really true? If you don’t have someone counting on you for financial support you may wonder, do I need an estate plan? What’s the urgency?
Believe it or not, it is equally important for you to have an estate plan—one customized for your needs—both for your benefit, and the benefit of those who are important to you.
Who Will Make Decisions for You if You Can’t?
The Pew Research Center reports that 20 percent of adults aged 25 and up in 2012 had never been married. In 1960, that figure was nine percent.
There are certain things married people take for granted. One is who will make medical or financial decisions for them if they are incapacitated by a sudden accident or illness. Almost always, it’s their spouse. The answer is murkier for the never-married. If you don’t have a spouse, you may have someone else you want making those critical decisions for you, but even if your wishes are known, the law will not require that they be honored unless you take the step of creating documents such as a durable financial power of attorney and medical power of attorney.
Even if the person you would want to make decisions for you, such as a parent or sibling, is the same person the law would likely designate, you should grant them that authority via your estate planning documents. Otherwise, they will likely have to petition a court for that power, which will consume time, energy and resources when they need all of those to care for you.
There is also a predicament which, while not unique to unmarried gay couples, is common to them. Without powers of attorney in place, an incapacitated person’s partner has no authority to make decisions for them. If the ill or injured person’s family disapproves of the relationship, they are able to prevent the partner from participating in any decisions, even if they know that they are acting against their relative’s wishes. If you are unmarried and in a relationship, your family might grant your partner a role in decision making on your behalf. But the only way to guarantee this is through a properly-prepared estate plan.
Where Will Your Assets Go If You Don’t Have an Estate Plan?
You may not have minor children or a stay-at-home spouse counting on you for support, but you should still consider where your money will go after you die. If you don’t make a will or trust, or otherwise pass your assets outside of probate, they will be distributed by the laws of intestate succession. Each state, including Michigan, has laws that determine who will inherit from a deceased person (decedent) in the absence of a valid estate plan.
If you’re like many single people, the time you aren’t putting into a marriage or raising a family is devoted to other things about which you care deeply.
For many people, having their estate distributed according to these laws means that their hard-earned assets will go to people they would prefer not to have them: estranged siblings and parents, perhaps, or cousins they barely knew. Even if you’re okay with your closest relatives inheriting your estate, however, estate planning means that more of it will go to them, and less to attorneys, court costs, and taxes. In addition, the administration of your estate will be smoother and more expedited with an estate plan.
If you’re like many single people, the time you aren’t putting into a marriage or raising a family is devoted to other things about which you care deeply: a valued charity or cause, or perhaps a circle of close friends who are like family. If you want to remember and honor those groups or individuals after your death, you will need an estate plan to guarantee that it is done. Your sister may know of your lifelong devotion to the Humane Society, but she is not obligated to donate any of the funds she inherits from you to them. Your parents may be aware that your partner is struggling to make ends meet without you, but that doesn’t require them to share the funds they know you would have wanted your partner to have.
So how do you protect your legacy and the people you love? By creating a will and trust. A will or trust allows you to designate who will inherit certain personal property, as well as financial assets and real estate. Not only does this minimize fighting over who gets what specific property, but in the case of a trust, can avoid the probate process as well. A charitable trust may save your estate taxes, but it will also cement your legacy, allowing you to support even after death an organization that was important to you during your life.
To learn more about why you need an estate plan as a single person, and what components it should have, we invite you to contact us to schedule a free initial consultation.