The short answer is singles should be doing the same things as people who are married and have families, except their situation may require some additional steps, says an article from Kiplinger, “Estate Planning for Singles.”
The most important thing is having a Durable Power of Attorney, naming someone as your agent so they can make financial decisions if you become incapacitated. Similarly, you should also appoint a Health Care Proxy to handle medical decisions.
If you don’t have a will, your state’s law will determine how your assets will be distributed, but no state will have a list of people to make financial or health care decisions for you.
Adult children often fill these roles, but it’s fine to look for other people to serve in these roles. A trusted friend whose judgment you trust completely and who is good at managing financial and legal matters could also serve in this role.
If the person you name to be your representative dies or becomes incapacitated, you’ll want to have a plan for someone else to take on the role.
Consider the age of the person you may want to serve in their role. If they are your age, can they take on these tasks if and when needed? A younger, trusted person may be a better choice, although there are no guarantees of age determining their availability.
If you don’t know anyone who could manage these roles, you could hire a professional, either an estate planning attorney, a trust company, or, in some states, someone licensed as a “professional fiduciary.”
What about your pets? An estate plan can also deal with issues of special concern to singles who own pets. You can use your will or create a pet trust to name a guardian and provide financial support for a furry or feathered friend.
Lastly, certain states have estate taxes, which have far lower exemptions than the current federal estate tax of more than $14 million. Some state estate taxes kick in on estates valued at less than $1 million and from nearly the first dollar in Pennsylvania. Married couples can delay estate taxes until the second spouse’s death, but singles need to plan for tax liabilities, which is part of an estate plan.
If you are single in Pennsylvania please click here for a consultation on what are the estate planning essentials for singles!
Reference: Kiplinger (Feb. 17, 2024) “Estate Planning for Singles”