These days, more and more young people are delaying—if not totally foregoing—a life that involves marriage and parenting. The lack of jobs, crushing student debt, the threat of recession, and the pandemic have pushed many young people into a life path that leaves little room for settling down with a partner and getting married—and even less room for having children. Yet, for other young adults, staying single and childless is simply a matter of choice. Regardless of the reason, as more young adults opt for non-traditional lifestyles, the number of single-childless households is likely to steadily increase in the coming years.
While most adults do not take estate planning as seriously as they should, if you are single with no children, you might think that there is really no need for you to worry about creating an estate plan. But this is a huge mistake. In fact, it can be even MORE important to have an estate plan if you are single without children.
If you are single without kids, you face several potential estate planning complications that are not an issue for those who are married with children. And this is true whether you are wealthy or have very limited assets. Indeed, without proper estate planning, you are not only jeopardizing your wealth and assets, but you are putting your life at risk, too. And that is not even mentioning the potential conflict, mess, and expense you are leaving for your surviving family and friends to deal with when something unexpected happens to you.
With this in mind, if you are single without children, consider these three inconvenient truths before you decide to forego estate planning.
1. Someone Will Have to Handle Your Affairs
Whether you are rich, poor, or somewhere in between, in the event of your death, everything you own will need to be located, managed, and passed on to someone, which can be a massive undertaking in itself—one that few families are properly prepared to face.
In fact, following a loved one’s death, American families spend an average of 500 hours and $12,700 over the course of 13 months (20 months if probate is required) to finalize the person’s affairs and settle their estate, according to the first annual Cost Of Dying report released this March by tech startup Empathy in partnership with Goldman Sachs. Look for additional articles in the coming weeks covering the Cost Of Dying and the new role
Empathy is playing in the end-of-life industry.
Without a clear estate plan, including a will or trust, your assets will go through the court process of probate, where a judge and state law will decide who gets everything you own. In the event that no family steps forward, your assets can possibly become the property of the state.
Why give the state everything you worked to build? And even if you have little financial wealth, you undoubtedly own a few sentimental items, maybe even pets, that you would like to pass to a close friend or favorite charity.
However, it is rare for someone to die without any family members stepping forward. It is far more likely that some relative you have not spoken with in years will come out of the woodwork to stake a claim. Without a will or trust, state intestacy laws establish which family members have a priority inheritance. If you are unmarried with no children, this hierarchy typically puts parents first, then siblings, and then more distant relatives like nieces, nephews, uncles, aunts, and cousins.
Depending on your family, this could have a potentially troubling outcome. For instance, what if your closest living relative is your estranged brother with serious addiction issues? Or what if your assets are passed on to a niece with poor money-management skills, who is likely to squander her inheritance?
And if your estate does contain significant wealth and assets, this could lead to a costly and contentious court battle, with all of your relatives hiring expensive lawyers to fight over your estate. In the end, this could tear your family apart, while making their lawyers rich—all because you did not think you needed an estate plan. We will work with you to create an estate plan that ensures that your assets will pass to the proper people while avoiding both unnecessary court proceedings and family conflict.
2. Someone Will Have Power Over Your Healthcare
Estate planning is not just about passing on your assets when you die. In fact, some of the most critical aspects of estate planning have nothing to do with your money at all but are aimed at protecting you while you are alive.
Proactive planning allows you to name the person you want to make healthcare decisions for you in the event that you are incapacitated and unable to make such decisions yourself. This is done using an estate planning tool known as medical power of attorney.
For example, if you have not established a medical power of attorney and become incapacitated due to a serious accident or illness rendering you unable to give doctors permission to perform a potentially risky medical treatment, it could be left up to a judge to decide who gets to make that decision on your behalf. If you have a romantic partner but are not married and have not granted him or her medical power of attorney, the court will likely have a family member, not your partner, make those decisions. Depending on your family, that person may make decisions contrary to what you or your partner would want.
And if you do not want your estranged brother to inherit your assets, you probably do not want him to have the power to make life-and-death decisions about your medical care. But that is exactly what could happen if something happens and you do not have a plan in place.
Furthermore, your family members, who have the priority to make decisions for you, could keep your dearest friends away from your bedside in the event of your hospitalization. Or, family members who do not share your values about the type of food you eat or the types of medical care you receive could be the ones making decisions about your care. To address these issues, you need to implement an estate planning tool that provides specific guidelines detailing exactly how you want your medical care to be managed during your incapacity, including critical end-of-life decisions. These end-of-life decisions can be addressed using an estate planning vehicle known as a living will.
Bottom line: If you are single with no children, you need to proactively address potential incapacity issues using the proper estate planning tools to name healthcare decision-makers for yourself and provide instructions on how you want those decisions made should you ever become incapacitated and unable to make those decisions yourself.
3. Someone Will Get Power Over Your Finances
As with healthcare decisions, if you become incapacitated and have not legally named someone to handle your finances while you are unable to do so, the court may have to pick someone for you. The way to avoid this is by granting someone you trust durable financial power of attorney.
A durable financial power of attorney is an estate planning vehicle that gives the person you choose the immediate or springing authority to manage your financial, legal, and business affairs if you are incapacitated. This agent will have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting your Social Security benefits, selling your home (if necessary), as well as managing your banking and investment accounts.
Without a signed durable financial power of attorney, your family and friends will have to go to court to get access to your finances, which not only takes time but could lead to the mismanagement—and even the loss—of your assets should the court grant this authority to the wrong person. The person you name does not have to be a lawyer or financial professional; it can be anybody you choose, including both family and friends. The most important aspect of your choice is selecting someone who is imminently trustworthy since they will have nearly complete control over your finances while you remain incapacitated. If you work with us to complete your estate plan, your agent will have access to our team as their trusted counsel should they need guidance or help.
Do Not Leave So Much At Risk Given these potential risks and costs for yourself and those you care about, you would be ill-advised to ignore or put off these basic estate planning strategies. Identifying the right estate planning tools is easy to do, and it begins with a Family Wealth Planning Session.
During this session, we will consider everything you own and everyone you love, and guide you to make informed, educated, and empowered choices for yourself and your loved ones.
In the end, it will likely take just a few hours of your time to make certain that your assets, healthcare, and finances will be managed in the most effective and affordable manner possible in the event of your death or incapacity. Do not leave your life and legacy at risk or leave a mess for the people you love; contact us, to get your estate planning handled today.
This article is a service of Reflections Life Planning LLC. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.