The contents of this website provides general information, is not advice and should not be treated as such. Do not rely on the information on this website as an alternative to legal advice from an attorney and, if you have any specific questions about any legal matter, you should consult your attorney.
Your Single Clients Need a Plan – Like Now
Creating an estate plan is more than just about one person’s desire to legally transfer property and assets after death to a spouse or children. As advisors, we’re mindful of the unique, but certainly not uncommon, planning needs of single clients.
A recent article in MarketWatch did a great job examining the issue of estate planning for singles.
When a person dies without a last will and testament, assets are disbursed according the laws of the state. For married people, that means a surviving spouse inherits those assets, even if they’re not jointly titled. For a single person, the same law means the assets will be handed off to close relatives (i.e. children, parents, siblings). And, when no relatives are available to inherit the estate, your client’s assets might even go to the state.
Let’s keep the state out of it, shall we?
The best way to keep the government from choosing the fate of your single client’s assets is to ensure he or she has the following essential documents in an estate plan drafted by an experienced attorney.
Will
The primary piece of the estate plan should always be a will. Single people may have special considerations to keep in mind while creating this document.
• Who does he want to be the executor if he doesn’t have (or want) any relatives to assume the task? Your client could choose a close friend or an objective third party. Also, naming beneficiaries for a single person may not be as obvious as it is for married people, particularly if there are no children or close relatives.
• Who will inherit items with sentimental value?
• Who will care for a beloved pet?
• Is there a charity your single client would like to support with donations of his assets or the liquidation of his estate?
Durable Financial Power of Attorney
If your client is incapacitated due to illness or injury, who can legally make financial decisions on his behalf? Married people generally name their spouses as durable financial power of attorney to manage their money issues. The choice is not as obvious for a single client. In our experience, most of our single clients choose a trusted friend or a close relative to handle financial affairs while they are unable to do so.
Healthcare Power of Attorney
At the same time, who speaks for your single client during a medical crisis? Who is authorized to discuss with doctors and make decisions about treatment and care? This person does not have to be the same one named as your client’s financial power of attorney, but the role should be filled by someone who will act according to your client’s expressed wishes regarding medical decisions.
Beneficiary Designations
Single clients should ensure that life insurance and retirement plan beneficiary designations are updated regularly to reflect life changes. Our suggestion is that these designations should align with your client’s beneficiary designations in the will to avoid confusion for loved ones.
Trust
There are several instances in which a single client is much better off to place his assets into a trust than to rely on a simple will. A well-drafted trust is designed to ensure those assets distributed according to your clients’ wishes without a probate your client’s involvement. In many cases, creating a trust will be far less expensive than what the estate will lose to probate costs (i.e. court filings and attorney fees).
A trust can also help a single client who wants to ensure a pet is properly cared for after his death, that a disabled loved one continues to receive financial support, or that a cause or charity he cared about in life will continue to benefit from the legacy he leaves behind. The protective powers of a trust are critical for business owners and professionals that want to ensure that what they worked so hard to achieve doesn’t simply dissolve upon death.
Don’t Ignore It
In the end, we know estate planning can seem like a daunting task for your clients, especially the unmarried ones. Many ignore the problem, accounting for a large number of single people who don’t even have a simple will. They have special considerations that need to be addressed and many don’t have relatives to help manage things. Therefore, your single clients are often in greater need of sound planning advice.
We hope this information was useful to you and helps your clients and their families. If you have a specific case or a question, don’t hesitate to call our office.