Singles benefit from estate planning.
There has been a trend for several years to delay marriage.
This means many people are often single throughout their twenties and into their early thirties.
It may be tempting for these individuals to forgo estate planning because they have no obvious heirs.
According to a recent Hood County News article titled “Even ‘singles’ need estate plans,” this choice can lead to significant complications for loved ones.
When a person dies without a last will and testament, it is called dying intestate.
When this happens, all assets must pass through probate for distribution, if there is no surviving joint owner or designated beneficiary.
Instead of being able to select heirs, the deceased single leaves these designations up to the laws of the state.
Although singles may have no children of their own; they may have nieces, nephews, or siblings to whom they would like to receive certain items.
It is always better to control who receives collectibles and family memorabilia.
Without an estate plan in place, people who do not value these items may become the recipients.
Singles who want to leave a portion of their estate to a charitable organization can either do so in their last will and testament or through a charitable remainder trust.
A charitable remainder trust allows a person to transfer “appreciated” assets into an irrevocable trust.
These typically include real estate, mutual funds, stocks, and other securities.
You can either designate a trustee or serve as trustee yourself for this type of trust.
What are some benefits?
You can sell the assets at full market value and not have to pay capital gains taxes on the appreciation.
You can receive an income stream by having the trust purchase income-producing assets.
Through itemizing, you can claim charitable deductions.
Sounds good so far, yes?
This is a good financial options for reducing taxes to the government while benefiting a worthy organization.
After you die, the remaining trust assets will be transferred to your charitable organization of choice.
Although other people and organizations will benefit from estate planning, singles can also benefit themselves by protecting their interests.
Incapacity planning around your health care and financial decisions is especially important.
Whether it be family or a trusted friend, you will need to designate agents to make decisions if you become incapacitated.
This is done through a general durable power of attorney and through an advance health care directive.
Without an estate plan in place, singles place themselves and their loved ones at risk.
Reference: Hood County News (Dec. 17, 2021) “Even ‘singles’ need estate plans”