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.