Many single people think estate planning is only for married couples with kids, but nothing can be further from the truth. Even single and childless people have assets that must be managed if they become incapacitated or die. Here are two things you need to do right now to ensure your wishes are followed after you can no longer make decisions for yourself.
Designate Your Beneficiaries
The prevailing assumption among single and childless people is that when they die, everything they own will just go to their nearest relatives. While it's true the state will disperse your assets to your closes related kin, it may not necessarily be the person you want to have your stuff. For instance, if you're hoping your things will go to your parent(s), it may end up being given to your sister if your parent(s) die before the probate court disperses your assets, which can take up to six months or more.
Additionally, you'll have to depend on the goodness of your relatives to give your friends and significant other the assets you want them to have, because non-relatives are essentially ignored by the court. This may be a recipe for disaster if your relatives don't approve of your relationships with certain people.
Therefore, the first thing you need to do is designate beneficiaries to your assets. Some assets, such as life insurance policies, have a space on the contract where you can fill in the person's name. For other assets, such as your home, you'll need to assign them to the people you want to have them in a will.
Don't forget, you'll need to review your beneficiaries on a regular basis and update them as necessary. The last thing you want is an ex-lover getting a million-dollar life insurance check just because you forgot to take his or her name off the policy after you broke up.
Decide Who Makes Decision at Critical Times
The other important thing you need is a power of attorney document that provides someone with the authority to make decisions on your behalf if you become incapacitated. This is particularly important if you don't have any relative healthcare providers can consult or your relationship with your kin isn't the best. You don't want someone who hates you with the passion that burns hotter than a thousand suns deciding whether the doctor should pull the plug.
A power of attorney document gives someone authority over your healthcare and/or finances, and it can be as limited or expansive as you need it to be. For example, you can limit the person's control to your checking accounts so he or she can pay your bills while you're in the hospital.
There are many other estate planning issues people who are single and childless need to consider. Contact an estate planning attorney for more information about these issues and help making the right choices for you.