Discussions about estate planning often leave the impression that every senior in the United States is a married person with children. This is clearly not the case, and everyone who doesn’t happen to fall into this category needs the same amount of estate planning guidance as those who do. In this week’s post as well as next week’s, I’ll write about estate planning needs for unmarried people.
Individuals who are not married should prioritize traditional estate planning documents that don’t have to do with disposition of property: the health care proxy (or advance medical directive or living will) and financial power of attorney. These documents are needed so that when an unmarried person is unable to make medical or financial decisions, they can choose someone and make sure that person’s authority is recognized.
For your financial power of attorney (POA), you need to choose someone(s) who can take care of financial matters if you become unable to. Make sure that this person then understands your financial affairs so that they can take over when necessary. Show them how you’ve set things up and how to find any important information. You’ll also need to make sure they have a copy of the POA and that your financial services firms will accept it.
When it comes to health care documents, you’ll need to designate one or more people who will know and follow your wishes. You may also need a document naming which people are allowed to visit you while you are in a hospital or other facility, as some places only allow family members to visit.
Long-term care insurance, or a plan to receive and pay for long-term care, should also be a priority for individuals who aren’t married, as you may need to do more of the decision making or navigate long-term care options independently.
When an unmarried person passes away without a will, state law determines how property is distributed. If this person has children, the property will likely be distributed among them in most states. However, if there are no children, it may be divided among parents, siblings, half-siblings, cousins, or nieces and nephews.
Having a will helps to ensure that property is distributed to the people one wishes, but it may be even better to have assets in a revocable living trust.
State probate law might require the estate executor to give notice to those who would have inherited property if a will did not exist. They might also need to construct a family tree and prove the death or divorce of extended members of the family.
This is part of why a revocable living trust might be the best option. Property in the trust avoids probate, and the terms of this trust dictate what is done with these assets. A will should also be prepared for those assets not in the living trust that don’t avoid probate.
Make sure to transfer ownership of property to this trust. People too often end up with “empty trusts” as a result of failing to transfer title of their homes, cars, financial accounts, and other property to the trust.
Finally, make sure to plan for who you wish to appoint to be successor trustee for the revocable living trust. You may have friends or family members who you would want for this role, or you might choose a trusted advisor such as an accountant or attorney and have the trust or estate incur the cost involved.
Next week, I’ll cover more unique estate planning needs for unmarried individuals.
For help creating or updating your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.