Estate Planning for Singles

Single clients often don’t think about estate planning as much as married clients, especially if they don’t have kids.  But, estate planning is even more critical for singles than married couples—and it has nothing to do with whom you’ll leave assets to when you die. A recent article from AARP, “6 Estate Planning Tips for Singles,” explains how estate planning addresses support during challenging life events.

To consider this, keep in mind that estate planning addresses medical and financial decisions for an incapacitated person, not just where you leave property when you die. For singles, these may be more complex questions to answer.

Whether someone has never married or is divorced or widowed, these are challenging questions to answer. However, they should be documented. In addition, singles with minor children need to nominate a trusted person who can care for their children if they cannot. Estate planning addresses all of these issues.

To be sure you complete this process, start with a conversation with an experienced estate planning attorney. This will help with accountability, ensuring that you start and finish the process.

See the original article for the fuller list, but here are some pointers for singles who keep putting this vital task off:

1.What would happen if you don’t leave clear instructions about who makes decisions for you during your incapacity? Some states have default decision makers for medical decisions, but not for financial ones.  Also, how will the person who acts (whether you chose them or not), know if you don’t want to be placed on a ventilator for artificial breathing or fed by a stomach tube while in a coma? Or how will they know what financial decisions you are ok with?

2. Dying without a will is known as dying “intestate.” All of your assets will be distributed according to the intestate succession laws in your state. That very often isn’t what clients wanted or are expecting, and typically is a far more expensive and time consuming process. Also, singles often want to leave assets to friends or non-family loved ones, and none of those individuals are beneficiaries in intestate laws.

3. Part of your estate plan includes naming a personal representative—an executor—who will oversee your affairs after your death. You’ll want to designate someone who is organized, has good judgment and can handle financial matters. You should also name a backup, so that if the first person cannot or does not wish to serve, there will be someone else to take control. This same issue applies to your financial and medical decision makers.

4. Your estate plan should include or at least consider the following:

Last will and testament. This is where you nominate your executor, heirs and how your assets will be distributed. Note that anyone named as a beneficiary on a retirement, insurance policy, or investment account supersedes any instructions in your will, so be sure to update those and check on them every few years to be sure they are still aligned with your wishes.

Living trust. This is a legal entity owning assets to be given to beneficiaries, managed by a trustee of your choosing, and avoids the delays and costs of probate. It also is helpful with managing assets during your incapacity

Financial Power of Attorney (POA). This document authorizes someone you name to act as your agent and make financial decisions if you cannot. A POA can prevent delays in accessing bank and investment accounts and paying your bills. The POA ends upon your death.

Living will, medical power of attorney, or advance health care directive. Different states use different documents here, but generally these documents allow you to designate someone to communicate your health care wishes when you cannot. For example, you can include instructions on pain management, organ donation and your wishes for life support measures.

Guardianship Nominations.  If you lack a fiduciary to control one of the issues described above during your lifetime, a court can appointment someone to do so.  That is far from ideal, but you can name who you want to be your guardian should it be necessary.  You can use similar documents to name guardians for your children.

Final Interment.  Estate plans, either through standalone documents or through the ones mentioned above, can indicate your final interment wishes (e.g. burial) and who you wish to be in charge of that process.

5. Be sure to communicate your wishes with family, friends and other advisors. Tell your fiduciaries where your documents may be found and provide them with the information they’ll need so they may act on your behalf.

Finally, we have a page on our website devoted to this topic, so see here for more ideas:  https://galligan-law.com/estate-planning-life-stages/planning-for-singles/

Reference: AARP (April 7, 2023) “6 Estate Planning Tips for Singles”

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What Do I Do If I’ve Lost an Important Document?

No matter how digital the world has become, sometimes you need the paper.  Living in a digital world has led many people to shred or discard important paper documents on the assumption they don’t need it.  Many critical documents are also very old, maybe even decades old.  Documents are lost when people move, mistaking originals for copies, they are discarded due to ignorance of their importance, or even disasters such as fires or floods.  Therefore, if they get lost, you should know how to replace them. AARP’s recent article entitled, “You’ve Lost an Important Document. Now What?” breaks it down for you.

Passport. To avoid becoming a victim of identity theft, report a lost or stolen passport by calling 877-487-2778 or completing Form DS-64 online at travel.state.gov. You can also print the form at the website and mail it to the U.S. State Department. To get a replacement passport, you must submit a Form DS-11 in person at a passport office.

Birth certificate. Contact the vital records office in the state where you were born and order a replacement.

Marriage certificate. Contact the clerk of the county where the license was issued. This office will let you know the documents required, the cost and how the copy can be issued (online, by mail, or in person).  Many of these are online as well, so obtaining copies in sometimes very easy.

Social Security card. First, consider the need for a replacement because you rarely need the physical card. However, a replacement should be obtained if you’re starting a new job or live in a state where you need it to apply for a Real ID. To obtain a new Social Security card, you’ll need a birth certificate, driver’s license, state-issued identification card, or a passport. You should then complete an application on the Social Security website (ssa.gov) and mail or take your application and original documents to your Social Security office (the website has information on locations). The replacement card is free.

Estate Planning Documents Laws relating to estate planning are different in each state. However, generally, if your will was accidentally lost or destroyed and not revoked, it will still be valid and represent your wishes, although proving its contents might be challenging.  Some states allow probating a copy, but not all.  For those that do, you must have left behind clear evidence that you didn’t revoke it—proof that it was accidentally destroyed or lost or testimony from an impartial third party stating that you didn’t plan to change it. Your heirs will also need evidence that it’s a true copy, which may require witnesses, affidavits or similar proof.  It might be doable, but will undoubtedly be more difficult and expensive.

The originals of other estate planning documents aren’t as important as the will, but of course they are good to retain.  Powers of attorney sometimes need to be recorded in real property records or produced to financial institutions or government offices who want to see originals.  Medical providers often accept copies which they upload into your patient file.  Trusts typically can be copies as well.

I would note, however, that the need for originals in estate planning has changed over time.  When I started practicing, originals were much more important.  I remember the Pennsylvania Department of Transportation always wanted to see originals.  They didn’t even make a copy of it, they just wanted to confirm its existence.  At that time, less states allowed the probate of will copies.  So, keeping in mind that the demands of third parties change, retaining the originals is important so you have them in the future, even if not needed now.

If you don’t have the originals, the best strategy by far is to reexecute estate planning documents.  Sometimes this is a happy accident because original documents from years ago need to be updated anyway, and so new documents will be created.  An estate planning attorney can advise you on that.

As a final thought here, an even better approach is to avoid losing originals by properly storing them.  See this article for ideas on that front. https://galligan-law.com/how-do-i-store-estate-planning-documents/

Car Title. The replacement process for the title to your vehicle varies by state. Contact your Department of Motor Vehicles. You may be able to submit a form, or you have to submit a photo ID, vehicle registration, or registration renewal notice.

Reference: AARP (Feb. 14, 2023 ) “You’ve Lost an Important Document. Now What?”

 

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Why Don’t Most Americans have an Estate Plan?

Just one of every three Americans has an estate plan in place, mostly because they don’t believe they have the assets to merit it.  However, everyone should consider having an estate plan.

Investment News’ recent article entitled “Procrastinating Americans putting off estate plans, says D.A. Davidson survey” says 34% of adults in the U.S. have an estate plan, according to a survey released recently by D.A. Davidson & Co. 37% of respondents also said they didn’t have a plan at the ready because they felt they didn’t have a large enough estate to warrant one. Procrastination came in second place, with 32% of those surveyed saying they simply “haven’t gotten around to it.”

The survey also showed that 20% of respondents who actually created estate plans haven’t updated them in the last five years.

Procrastination is a human, and understandable, reason for people not to have an estate plan.  However, lack of assets isn’t.  Estate plans aren’t just for the wealthy.  Estate plans quite critically help with incapacity planning, such as when you need someone to access your money for you, or to make medical decisions on your behalf.

Estate planning helps ensure what you have, whether a lot or a little, goes to the loved ones you intended.  It also can appoint guardians for minors.

I’ve often to put it to clients that a lack of assets makes estate planning even more critical.  You can’t afford to go through a costly or inefficient estate process when you don’t own much.  The process will quickly eat up what you have.  You need to plan to preserve as much as you can.

See here for more basics to estate planning and why they are essential.  https://galligan-law.com/the-basics-of-estate-planning/

Consulting an experienced estate planning attorney has a positive effect when it comes to creating an estate plan. The survey said that the number of those having a plan jumped from 18% to 56%, if they worked with a professional at some point.

The survey showed those who have worked with a professional also feel more confident and prepared discussing their estate plan and end-of-life wishes than those who have never worked with one.

In terms of gender differences, 72% of the women surveyed don’t have an estate plan compared to 59% of men. This spread should narrow as the wage gap closes between male and females.

A married couple will typically pass their full estate to the surviving spouse. Statistics show that the surviving spouse is likely a woman, and she will then need to pass her remaining estate to the next generation. That can be complicated, with things like family dynamics playing a major part which underscores the importance of estate planning at that stage.

Regardless of gender, it is extremely important for everyone to have an estate plan.  If you are interested in starting or aren’t sure how to begin, we’ve prepared an article on preparing for an estate planning meeting which you can find here:  https://galligan-law.com/preparing-for-an-estate-planning-meeting/

Reference: Investment News (Oct. 11, 2022) “Procrastinating Americans putting off estate plans, says D.A. Davidson survey”

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