If you’re single, there are fewer automatic rules about who gets your assets or who helps with your healthcare. To avoid any issues, it’s a good idea to create an estate plan that addresses these matters.
The Single Person’s Guide to Estate Planning
The number of Americans choosing to stay single is on the rise, and if you are one of the 31% of people who aren’t in a relationship, it’s important to take a close look at your estate planning. The right estate plan can address your unique needs and solve some of the potential challenges of singlehood. Here are some things you’ll need to keep in mind as you prepare for the future.
Simplify Medical Care With Healthcare Power of Attorney
One of the most common issues single people face is healthcare in the event of incapacity. If you haven’t formally listed anyone, there can be confusion when you are ill or injured. Your parents, children, and other close family members could end up disagreeing about how to best care for you. Things become even more complicated if you are estranged from family because friends and roommates won’t have the legal right to represent your wishes. This can lead to stressful arguments and possibly delays in treatment.
A medical power of attorney clears up this issue. These documents let you formally list who can make medical decisions on your behalf. You’re able to choose anyone you want, so a trusted friend, roommate, or mentor can care for you. Power of attorney documents don’t have any impact on you while you’re healthy, but if you’re sick and unable to speak up, they go into effect.
Use Trusts or Power of Attorney to Manage Your Assets
If you’re incapacitated, who will pay your rent, take your pet to the vet, or keep your business running? An estate planning lawyer can give you several options for dealing with this dilemma.
A simple and straightforward choice is a financial power of attorney document. This lets you pick someone to handle your legal and financial matters instead. With a power of attorney in place, someone you trust can access your accounts and handle finances for you if you are mentally or physically incapacitated.
Another surprisingly useful option is a revocable trust where you are both the beneficiary and the trustee. In day-to-day life, you can manage and benefit from the assets in the trust. However, if you’re unable to care for yourself, a successor trustee steps into place and handles things for you. Though trusts take a little more time to set up, they’re very helpful. Not only do they streamline things if you pass away, but they can also reduce some types of taxes.
Make Sure That Your Property Goes to the Right Person
What happens if you die without a will or trust? In New Jersey, single people’s assets would automatically go to either their children, parents, siblings, or other remaining family. If you have no family, your property will go to the state. Therefore, if you don’t want the person who is most closely related to you to get all your assets, an estate plan is essential. This lets you do things like divide property among nieces and nephews or leave funds to a friend or favorite charity.
Creating a will for a single person is about more than just disinheriting family members you dislike. It also reduces the tax burden for your loved ones. Often, if you pass away, your property will end up going to your parents who might then want to distribute it to your siblings. In this case, your parents would need to pay an inheritance tax, and your siblings would then need to pay a gift tax. Choosing to create a will and name your sibling is the only way to avoid these unnecessary taxes.
The Knee Law Firm is here to help you with all your New Jersey estate planning needs. Our experienced estate planning lawyers can discuss your situation, point out potential concerns you should address, and create the right legal documents for your situation. We’ll ensure that you’re fully prepared for any unexpected events and help ensure all your wishes are followed after you pass. To learn more about our estate planning services, call 201-996-1200.