Estate planning can be challenging for the single person. A lot of decisions need to be made and often this is the last thing on a person’s mind. While it may be tempting to ignore this phase of planning, but having a sound estate plan in place reduces stress and anxiety on the family and survivors.
Estate Planning
Estate planning help you in handing over your legacy to survivors with minimal dispute!
Need for Estate Planning
Wills and trusts are legal documents that ensure your wishes are carried out. Estate planning for the single person differs from as for married couples. When a single person dies without leaving a will, the surviving parents and siblings as a rule inherit equal shares of the estate. If one parent is deceased, usually the surviving one inherits both shares. If a sibling died and is survived by descendants, their descendants inherit their share. If there are no surviving first-degree relatives, the estate is divided equally between the remaining family members.
Thus for single person, It’s important that person draw up an estate plan that includes specific instructions on how to manage their affairs.
Steps in Estate Planning
Systematic approach involves these staps
Listing all assets and debts
List down all your assets and debts. It’s a good practice to mention the account numbers, location of assets, etc.
Develop a contingency plan
Develop a contingency plan wherein you will provide guidelines for managing your assets if you or your partner becomes incapacitated. This includes the strategy to provide for income.
Making provision for dependents
Provision for dependents is the primary concern, to protect your loved ones and their future needs. One must include the name of guardian if children’s age is below 18.
Creating a Trust
A trust involves executing a trust deed, transferring of one’s estate to a trustee for the benefit of certain beneficiaries which may include the person creating the trust who is called the settlor /author of the Trust.
Living Will and Estate Planning
A will/testament is a legal declaration of a person’s intention with respect to their property which person desires to be carried into effect after the death. Thus, a will operates only after the death of the person.
One must always make a will to pass on your property as per your wish.
A living will documents your wishes about your end-of-life medical treatment in case you become unable to do so. Choose someone trustable to make decisions for you per your wishes when you become too ill. If you don’t have a living will on file, not only your friends and family, but your medical team must decide what is in your best interest.
Often a living will and a durable power of attorney, which appoints a healthcare proxy to carry out the end-of-life treatment plan set out in your living will, are used together. State laws vary, but as a rule two physicians must attest that you are incapable of making your own medical decisions.
A living will is revocable any time.
Challenges in Estate Planning
- Estate planning law varies by state and understanding interstate laws could be confusing
- Building contingencies and flexibility in the estate plan that can adapt to an unknown future and be responsive to changes that may come up could be quite complicated
- Connecting Assets to the Estate Plan to ensure that asset ownership and beneficiary designations are properly coordinated with the estate plan and will go smoothly