Estate Planning for a Single Person
Many people believe that estate planning for a single person is not a priority, but this approach fails to understand how comprehensive estate planning can actually be for an individual. In fact, if you are a single person, your estate plan may be even more important in terms of guaranteeing that your legacy is dealt with in accordance with your wishes and that your healthcare decisions are honored in the event you are not able to address them yourself. If you are single, your estate plan matters, and the experienced estate planning attorney at the Jennifer V. Abelaj Law Firm (212-328-9568; abelajlaw.com) in New York has the experience and legal insight to help.
Recognizing Decision-Making Authority
If you are single (unmarried and without children), you are unlikely to have anyone whom the State of New York will readily recognize – absent an advance directive – as having the authority to make healthcare decisions on your behalf (in the event you are incapacitated). The same is also true of any financial decisions that need to be made in the course of your incapacitation. While a spouse or child can fill this role for married individuals, you face unique challenges in terms of estate planning for a single person. This makes establishing both a financial power of attorney (as defined by the New York State Bar Association) and a healthcare proxy paramount for those who are single. If you cannot make primary decisions regarding your health and/or finances on your own (due to incapacitation), you want someone whom you trust to do so on your behalf – in accordance with your wishes and with your best interests in mind – and this can be addressed in your estate planning efforts.
Dying Intestate (Without a Will)
If you were to pass away without a will in place, your assets, which amount to your financial legacy, will be distributed by the court in accordance with state law. If you are married with children, this distribution is likely to align with your basic wishes, but if you are single, this is not necessarily the case. New York intestacy laws, which guide how assets are distributed when there is no will or estate planning document, dictate that the assets of single people who have no children are distributed as follows:
- Your assets (in their entirety) will pass to your parents.
- If you do not have a living parent, your assets (in their entirety) will pass to your siblings.
If neither of these applies in your situation, your estate will likely be divided between your mother and father’s relatives, including distant cousins. In other words, estate planning for a single person is exceptionally important, and the practiced estate planning attorney at Jennifer V. Abelaj Law Firm in New York is well positioned to help you address your unique estate planning needs.
Taking Important Steps Forward
It is easier for single people to ignore the matter of estate planning, however taking the time to solidify your wishes now can provide you with considerable peace of mind moving forward. Further, if you are inching toward retirement age, the time for estate planning for a single person is now. In addition to setting up a financial power of attorney (POA) and a healthcare proxy, there are a variety of important steps you should take.
Make Your Will
One of the most important aspects of your estate plan involves making your will, which names your estate’s executor – who will be imbued with the authority to engage in all the following:
- Attending to your affairs (in accordance with your wishes) after your death
- Probating your Will (if the need arises)
- Paying both your income and estate taxes
- Allowing for estate tax planning
In order to streamline the process of passing your assets on, the best course of action is generally making a revocable trust (created during your lifetime) the beneficiary of your will.
Create a Revocable Trust
Over the course of your lifetime, you may have built a financial legacy that continues to grow, and upon your death, you want your assets to flow to your loved ones – and/or to charities that are meaningful to you – in accordance with your wishes. A revocable trust provides you with the tools necessary to do so. For example, if you have a significant other to whom you are not married, including his or her name as a specific beneficiary of your trust will ensure that he or she receives those assets that you want him or her to have. Further, you may want him or her to remain in your home until his or her passing – when the property may move on to a relative (or someone else of your choosing) – as identified in your revocable trust. Setting up a revocable trust is an excellent way to specifically address the unique challenges that are often part of estate planning for a single person.
Fund a Trust Today
The importance of funding a trust throughout your lifetime cannot be overstated. If you are incapacitated at a later date, your trust’s successor trustee can use the funds therein to pay for your healthcare needs (in accordance with your specific wishes). If you have not successfully completed the steps of setting up a trust and funding it, those who are closest to you may be required to have a guardian or conservator appointed on your behalf, which can be a lengthy and complicated process. By funding your trust now, you accomplish both the following:
- You control who will be managing the assets you have included in the trust.
- You ensure that the assets you have included in the trust avoid the probate process.
Estate Tax Planning
For a single person who has assets that have a total value that is greater than the New York State or Federal Estate Tax Exemption, they must take deliberate steps to address minimizing estate taxes. A married person may take advantage of the unlimited marital deduction for assets that pass to a surviving spouse. However, a single person does not have this deduction available. This is most pressing for single persons who have a partner (or children), and who will bear the estate tax burden. Options might include charitable bequests, gifting during life, or creating irrevocable trusts that remove assets from your estate. This can only be done with advanced estate planning.
Reach Out to an Experienced New York Estate Planning Attorney Today
Estate planning for a single person is extremely important. In fact, you could be facing challenges that married individuals with children do not. Whatever your unique estate planning needs are, the experienced New York estate planning attorneys at the Jennifer V. Abelaj Law Firm can help. To learn more, please do not wait to contact or call us at 212-328-9568 today.
Estate Planning for Young Adults and College Students
Congratulations! You graduated high school or college and are ready to start adulting. Moving into your new dorm. Meeting or seeing new friends. Long days and nights studying. Fun on the weekends – of course! College and post-grad is supposed to be a fun and enlightening time. But with the fun, also comes some responsibility.
Welcome to Adulthood – Under the Law anyway
As soon as you turn 18, the law says that you are an official adult. Maybe you are still living with your parents, so you don’t feel like an adult. But if something happens to you, they have no legal rights to make decisions on your behalf.
Important Adult Decisions: Who do you Trust to Help?
You can appoint someone you trust to take care of your affairs if something happens to you. This may be one or both of your parents, an aunt or uncle, a sibling, or a trusted friend.
Document Your Selections and Authorized Powers
The basic and simple documents to appoint a trusted person is a Health Care Proxy and Power of Attorney.
In the Health Care Proxy, you choose the first person that you want to be responsible to speak with doctors and hospital staff, make medical decisions about treatment and surgery, and choose to withhold life support if you are in a catastrophic health situation. You can appoint more than one person, in successive order.
This document only takes effect if you cannot communicate your own preferences. This might occur if you are in a coma. So long as you are still able to communicate, you have complete control over your own health care decisions.
In the Power of Attorney, you may authorize one or more persons to make financial decisions on your behalf. This might include speaking with your bank, communicating with your Bursar office, or paying your outstanding expenses.
This document is useful even if you are not sick or injured. It may provide convenience to your agent to assist in your financial affairs while you are on campus and away from home.
Easy to Prepare and Sign
In order to prepare a Health Care Proxy, you need to provide your name and home address and the name, home address and telephone numbers of your selected agents. Once the document is prepared, you must sign it in the presence of two witnesses. That’s it!
Preparing a simple Power of Attorney is just as easy. Provide the name and home address of your chosen agents. Decide if you want them to be able to work separately or if they must act together. Once the document is prepared, you must initial it in certain sections, sign and date it in the presence of two witnesses and a notary. That’s it!
An attorney can easily prepare these documents for you. Once you have them signed, they are valid until you decide to execute a new document. This means you sign once, and you may be covered for many years without having to think about it again. But you have the peace of mind that someone is appointed to take care of you and your affairs if you cannot do so.
Now is the Perfect Time
The summer or winter break is an ideal time to prepare these documents. It give you the opportunity to consider and decide who should be your agents, work with an attorney to prepare and sign the documents, and have it done before you head back to your studies.
Flat-Fee for Young Adults (ages 18-24)
Our office is currently offering these important documents to young adults (between the ages of 18 and 24) for a low flat-fee of $175 per document. We can turn them around for your signature within 2 weeks. This includes supervising the execution and providing witnesses and a notary. Do not hesitate to contact me if you would like assistance.
Basics of Estate Planning
Estate planning is a broad term for preparing your assets and your family’s needs in the event of your disability of death. The type of planning appropriate for you will depend on the composition of your assets, your family structure and dynamic, the value of your estate, or your country of residence.
Estates Come in all Shapes and Sizes
What do you think about when you hear the term “estate” planning? It’s possible you may be thinking that an estate exists only if there is significant wealth, multiple assets, or many family members. But an estate exists as soon as you have any asset in your name, regardless of the value.
Smaller estates may only require very basic planning, such as a Will, Health Care Proxy and Living Will, and Power of Attorney. A larger estate may benefit from additional estate and income tax planning, creation of trusts, or structuring the sale or distribution of a family business.
The estate planning is tailored for your needs. Although it may seem simple enough, the process to consider who receives your assets is as unique as you are.
Take Action During Family of Financial Milestones
A good time to prepare an initial estate plan or review your existing plan is when there is a family or financial milestone in your life. Common milestones include marriage, birth of a child, divorce, purchase of a home, retirement or increase in wealth.
Prepare a Will
Individuals sometimes ask me if they REALLY need a Will. As a trust and estates lawyer for over 10 years, I can unequivocally say the answer is YES!
If you die without a Will, the State (or country) of your primary residence will determine who receives your estate and in what portions. This does not mean that the State gets your assets – only that your estate will be distributed according to their rules. You may not like the default distribution. A Will or Trust allows you to override the default distribution in accordance with your wishes.
Distribution without a Will (Intestacy)
Generally, spouses cannot be disinherited (unless there is a pre- or post-nuptial agreement). Statutory intestacy rules may provide that the remainder of your Estate must be distributed to equally to your children, grandchildren, or your parents. This may not be the best distribution for your family.
In particular, if you have minor children, it is preferable to have their share held in a trust until they reach a certain age. Without a Will or Trust, you would be unable to do this and the child would receive the entire distribution at age 21. The risk of a full distribution at age 21 is that the child may splurge it all at one. Most parents prefer that the child’s assets be held for their benefit until a later age – 35, 40 or even longer – so that the child has access to funds at various milestones.
Additional Benefits of a Will or Trust: You call the shots!
A testamentary document, such as a Will or Trust, allows you to decide who will manage the administration of your Estate by appointing an Executor or Trustee. By clearly identifying an individual, your family members will not have to decide who should (or shouldn’t) be in charge.
You can also provide that the Executor or Trustee may serve without filing a bond. The default in many States requires that the Administrator file a bond, which can be costly for the estate and create delays in collecting the assets. By avoiding a bond, your assets can be collected sooner and distributed to your beneficiaries without the expense of a bond.
If you have minor children, you can designate a preferred guardian if both parents are deceased. During such a difficult time, your children would benefit from having the security of a designated guardian without having relatives argue over who is best suited to care for the child.
Estate Taxes
Federal law allows an individual a lifetime estate and gift tax exemption of $13,610,000 (for 2024). New York law provides an exemption of $6,940,000. These are historically high exemption amounts. Although the values usually increase annually, there have been instances where these values went down.
If your estate is near either of these values, you should consider various estate planning strategies now to reduce your estate tax exposure. This may include creating lifetime trusts, making gifts to your heirs during life, or giving a portion to charity.
Next Steps
A skilled estate planning attorney can provide tailored options for your assets and family structure.
Do not hesitate to contact me if you need assistance with your estate planning.