When people think of estate planning, they usually think it is only something they need to worry about if they have a spouse or children–in other words, Estate Plans are something you put in place to take care of your family in case you die. There is definitely a justification for this understanding, but actually, if you have a decent-sized estate, it may be even more important to have a plan in place if you don’t have a spouse or children. Here are some reasons why.
An Estate Plan is not just having a Will. A complete Estate Plan can involve all sorts of other legal instruments: a durable power of attorney for health and/or for finances, Trusts, advance health directives, and so on. When you don’t have these instruments in place and something happens to you, what happens to all of your assets?
For example, suppose you get into a serious accident and are unable to manage your own affairs for a while. Who makes sure your bills are paid while you are unable to take care of them? Who makes your healthcare decisions for you? And if you die: who arranges your funeral? Who will get all your assets? This is a real problem that affects real people. When you don’t have an Estate Plan in place that addresses these contingencies, then the law conveniently steps in to either decide these questions for you or decide who gets to make these decisions for you. But you might not like how the law works and whom the law chooses.
The simplest scenario that invites the law into your affairs is dying without a Will. Every state has what is called “intestate laws.” These laws specifically provide how an estate is divided up when someone dies without a Will.
If you had a spouse and/or children, they would likely get the lion’s share of the estate (as said above, it depends on what the state’s laws provide), but they still might not get everything.
But when you are unmarried, and you do not have children, your estate will likely be divided among your parents and/or siblings (including half-siblings) according to whatever formula the state laws specify. If you have no direct family, your estate could end up in the hands of uncles and aunts or cousins, even if you have never met them. No person who is not related to you will get anything, and a judge will appoint someone to make sure it all happens according to the law.
Conversely, if you have an Estate Plan in place, including a Will, then you get to decide, ahead of time, who ought to benefit from your estate. Maybe it is a few close friends or even a beloved charity. Or maybe it is just one of your siblings to whom you are very close, and not to those family members from whom you are estranged. The bottom line is, you get to decide what you want: who will take care of your dog, who gets your assets, or even what music should be played at your funeral.
Another possibility to consider is incapacitation, whether temporary or permanent: a coma, a medical debility, and so on. In the event you are not able to manage your own affairs, you can provide for someone else to handle them by putting in place a power of attorney. This can be for either, or, medical or financial decisions. You may create separate documents and designate different people, or you can name one person to do both.
When you are unable to take care of your own affairs, whether it is paying bills or making medical decisions, then the person you designate can make these decisions on your behalf. You can even specify your own wishes regarding your health; for example, you can specify that you do not want to be revived or kept on life support under certain circumstances. You can make your wishes clear to everyone, and relieve your family and friends from the uncomfortable and grave burden of having to make those decisions.
Without these documents in place, however, state laws, and even state courts, may have to get involved to name guardians or conservators for you. Courts will usually appoint a relative, but they may have to appoint a neutral third party. Moreover, this process can cause delay, particularly if there are disputes among your relatives as to who ought to have this authority. If you are incapacitated, these delays can impact your well-being, and you may not be happy with the decisions that the court makes for you.
Get Started Now With an Estate Plan
The fact is, when you do not have an Estate Plan in place, state laws govern how your estate is divided upon your death, and who will manage your affairs if you become capacitated. If you are married, state laws will most likely defer to a spouse when it comes to these types of situations. But when you are not married, the courts will have more leeway on who should manage your affairs. While both situations are probably unsatisfactory, failing to have an Estate Plan when you are not married introduces more uncertainty to these important matters.
Remember, your Estate Plan is not just about what happens if you die; after all, you might not really care what happens after you are gone. But you will care about how you are taken care of should you become incapacitated, and you probably do not want to leave those decisions in someone else’s hands.
The wise option is to put a plan in place now, even if it is very basic. Not only will it give you peace of mind in the event something should happen to you, but the process will help you to think through what you really want to happen. If and when you do get married, it will be relatively easy to alter your Estate Plan at that time. To find out more and to start planning, contact eLegacy today.