Many people imagine older adults and parents with young children when they think about estate planning. It might surprise some to know that even young, single people need to have an estate plan.
Your estate plan addresses your belongings after you pass away, but it doesn’t stop there. It provides medical and financial instructions that must be followed if you can’t make decisions on your own. Here are a few things that single adults should remember about estate planning:
Your final days
If you become incapacitated prior to your death, your loved ones can use powers of attorney designations to make financial and medical decisions for you. These designations can be given to the same person or you can choose a different person for each category. You must consider how the people with these designations will handle the duties because they must be able to put their own desires aside and focus on what you would want.
When it comes to health care decisions, you need to set up a health care directive that outlines your wishes. Be very clear about what medical treatments you are willing to undergo and which ones you will absolutely refuse. The more detailed this document, the better.
Even if you don’t have a high value portfolio, you still need to leave instructions about what you want to happen with your assets. Think about how you will transfer the assets you do have. This is going to be much different from what you’d do if you were married.
Sometimes, the best way to handle your assets is to place them in trusts. You should consider the different types of trusts available so that you can make a decision that is in line with your goals.
As you prepare your estate plan, you need to think about tax implications of the estate. This might not be a consideration if you don’t have a high value estate, but it is a good idea to find out how the taxes can impact your loved ones when you are gone.
As you create your estate plan, remember that it is not limited to one document. Make sure that you review all of the documents together to make sure that they are clear, detailed and accurately represent your wishes. Take the time to discuss the plans with your loved ones so they can ask questions and get clarifications now.