Are you single with no kids and approaching retirement? If so, you probably have not given much thought to estate planning. You may have been busy building your career, socking away money, and enjoying your time off with weekends away and exotic vacations. Forbes’ recent article, “5 Estate Planning Strategies For Singles,” says that, as you move closer to retirement, you should seriously think about your estate plan. Here are some important components:
Power of attorney and a health care proxy. These are used while you’re still alive. They let you choose who will make important financial and medical decisions for you if you can’t make them for yourself. A single person must be sure that she’s named someone she trusts to make these decisions. When you die, the power of attorney and health care proxy is no longer valid, so your estate planning also needs to include a will or a trust.
Will. You need to designate an executor of your estate. This individual will take care of your affairs after you die, probate your will if necessary and pay any income and estate taxes. The beneficiary of your will can also be a revocable trust that you create during your lifetime.
Revocable trust. While you are alive, you should be named the primary beneficiary. You may also want to provide benefits for your significant other, especially if you live together and you’re the primary breadwinner. Name the beneficiaries who’ll receive the assets at your death. You also need to name a successor trustee to manage the trust assets, in the event you are unable to manage them yourself. The successor trustee will play an important role if you’re incapacitated. As a single person, naming someone to manage the assets for you is an important part of your estate planning. If you fund the trust during your lifetime and are later incapacitated, the successor trustee can use the funds for your care.
Estate taxes. Many singles don’t mind if their beneficiaries receive less, and the government receives more. However, if you do care, there are many planning options to consider, such as charitable giving as a way to reduce taxes and give back to those charitable institutions that have played an important role in your life. You can also make lifetime gifts to family and friends.
If you’re that single person without an estate plan, don’t wait until the last minute, or it will be too late. Instead, request a consultation with one of our Madison area estate planning attorneys to start a discussion about your estate planning needs.