Tying the knot and having kids can change your finances significantly. One of the most important tools to protect your loved ones in such a scenario is a will. But if you are single – and far off from starting a family – you might be asking yourself: do I really need to make formal estate plans?
As a single person, it is easy to assume that you don’t need the legal protections offered by estate planning. This is a popular misconception; the reality is that virtually everyone can benefit from advanced planning. If you pass away without first outlining your wishes, the courts will determine your heirs. If you have no heirs, your assets will go to the state.
Basic estate planning is far simpler than most people assume. Here are a few ways to protect your legacy for the long haul:
A will allows you to state the names of people who should receive your assets. Wills also allow you to designate an executor, or the person who will handle your estate after you pass. They are in charge of making sure debts are paid and that your belongings end up where you intended them to go.
Without a will, the court can appoint a family member to act as your administrator. The duties are the same as an executor. The Court will additionally appoint an attorney to represent unknown heirs. This will get expensive for your family. By creating a will, you will prevent your loved ones from incurring additional legal fees.
Without a spouse or children to provide for, many single people opt to leave their assets to charity. The easiest way to do this is through estate planning. You can list a charity as a beneficiary in your will in the same way you would list an individual. Charitable bequests are ideal for one-off donations. However, if you hope to support an organization over an extended period, you might want to establish a charitable trust.
Charitable trusts are separate legal entities that hold assets for you and give you tax advantages. You fund the trust, which then distributes money to a charity of your choice. You can structure such arrangements as either a charitable remainder trust or a charitable lead trust – both options come with income tax benefits.
If you are in a coma, do you know who will handle your affairs? Whether single or married, everyone needs to make plans for possible incapacitation. Designating your medical power of attorney will allow another person to make medical decisions on your behalf. Similarly, financial power of attorney designations allow another individual to assist with legal and financial decisions, like paying your bills or accessing your bank account.
If you are single and unsure of how to best begin estate planning, reach out to our team. It’s never too early to begin planning for the future. Take that first step today by calling us at (281) 885-8826 or click here to schedule your appointment online.
Hegwood Law Group