The Importance of Estate Planning for Single People

Single individuals sometimes think “I’m not married, so why do I need estate planning?” The answer is that estate planning not only plans for the disposition of a person’s assets upon their death, but also plans for incapacity.  This article will focus on why planning for both incapacity and for the disposition of assets is just as important for single individuals, if not more, as it is for couples.

Planning for Incapacity

It is important for everyone over the age of 18 to have a plan in place for who will step in to help with important decision making, such as health care or the management of finances, in the event of incapacity. There are two documents we use to accomplish this: a Health Care Proxy with Living Will and a Power of Attorney.

A Health Care Proxy with Living Will allows you to appoint an agent to make health care decisions on your behalf if you are unable to communicate your wishes to your doctor. This can be especially important for a single individual. New York allows you to name health care agents in successive order if you are incapacitated and unable to make health care decisions for yourself. These decisions can be life or death decisions. 

For single individuals, if you do not have a health care agent or guardian, New York law would allow a child over 18 to be the surrogate decision maker. Where this can get messy is when a person has more than one child and the children disagree. 

If you do not have children but have a living parent, the parent is next in line under New York law. Next come siblings over 18 (again, there could be more than one sibling who may not agree), and then a close friend (of course, you could have more than one close friend). As you can see, if you do not name your own health care agents, you could end up with someone making decisions about your life that may not have been your ideal choice and they may not know what decisions you would have made for yourself.

A Power of Attorney allows you to appoint an agent who is authorized to act on your behalf in financial and legal matters. Having this document in place can remove the need for a guardianship proceeding over your property if you become incapacitated. A guardianship proceeding is costly, time consuming and involves a court proceeding to determine whether a guardian is necessary.

Elderly single individuals can be easy targets for scammers and thieves. Having a Power of Attorney in place to oversee your finances when you start to lose capacity can help to protect you from these threats. It is important to name agents to help take care of your affairs while you have sound judgment and capacity to make those decisions. 

Lastly, a Power of Attorney can be revoked, and you can appoint someone new to serve as an agent if you have capacity to do so. Don’t make the mistake of waiting to appoint an agent because you haven’t found the perfect person to serve. Consider who you feel comfortable with in your present life and discuss your options with your estate planning attorney.

Planning for Disposition of Assets

If a single individual has no Will or Trust in place that names beneficiaries to receive assets after their passing, any assets in their name alone (meaning, no joint owners or beneficiaries are named) will pass to their heirs in accordance with New York State law. This means that if you are single, but you have children, your assets will pass to your children equally. If you do not have children, but are survived by your parent(s), your assets will pass to them. If your parent(s), are deceased, your assets pass to your siblings, if any. If you are only survived by heirs further remote than siblings, or nieces/nephews, assets could pass to distant relatives such as cousins or first cousins once removed (and so on). You may not even know who your distant relatives are, let alone want them to receive your assets upon your passing

It is important to have either a Will or Trust in place in order to specify how you would like your assets to be distributed upon your death. If you have no relatives to whom you would like to leave assets, you could choose friends or charities. This can only be accomplished by creating a Will or a Trust.

One reason why a Trust may be a better choice for single individuals is that if a person dies with assets in their name alone and an Executor (or Administrator, when there is no Will) needs to be appointed to collect assets, part of the process for an estate proceeding is the requirement of filing a family tree in New York Surrogate’s Courts. When individuals have no known relatives or very few known relatives, the family tree can be difficult to prepare and can cost the Estate a lot of money in legal fees to complete family research and the preparation of the family tree. Additionally, if some of the relatives are unknown, the Estate is required to publish in local newspapers in order to try to locate them.  Ironically, some individuals think their estates are simple when they do not have many family members, but those Estates tend to be more complicated because of the Court requirements for Probate and Estate Administration.  Your Estate can be simplified in this case with a Trust, which generally requires no Court proceeding (unless there are issues with beneficiaries). 

If you are interested in discussing the importance of estate planning for single individuals, please contact Harris-Pero & Botelho, PLLC at 518-860-5668 to review your options. Harris-Pero & Botelho, PLLC is a women-owned law firm in Saratoga Springs, NY focused on helping people plan and prepare for life transitions.  We practice estate planning, estate administration, elder law, and business law.