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Estate Planning for a Single Person

When we think of estate planning, most of the time we think in the context of spouses and children. In fact, most people do wind up bequeathing everything to their spouse and their kids. At the same time, power of attorney and advance health care directives are usually delegated to spouses and children.

Yet, there are many successful persons who are perfectly content, are not married and do not have children. Some may never marry and never have children. What about their estate planning mindset? Recent statistics indicate that as many as 1 in 4 adults over the age of 25 are not married while 15%-20% or more of women over the age of 40 have not had children.

Here are some estate planning considerations to think about for the never-married:

Let’s say that someone dies who is financially successful but has never married and has no children. Let’s add to this the fact that this person does not have any estate planning documents. What happens?

In most cases, that person’s estate would be (expensively) probated and the estate divided among heirs. In California the Probate Code has a rigid structure for determining heirs. Normally an estate would travel back to parents. If the parents are deceased, however, then the estate would pass to siblings. If there are siblings who are deceased but have living children, the estate would pass to nieces or nephews. If there are no siblings or family members of any kind in the picture, however, the estate most likely would eventually ‘escheat’ to the state, i.e., go into California’s bank account.

For the single successful person, this may not be a scenario they would wish for. All the more reason the single person should consult with a financial planner and estate planning attorney.

The single person may only want to leave a portion of their estate to family. They may want to leave money to charity for tax reasons or for a cause that they feel strongly about. They may have cherished environmental or arts causes. They may want to leave money to the school they attended. Many organizations and institutions have planned giving programs available to participate in. This is where a meeting with a financial planner to discuss those options would be appropriate. After that, a meeting with an estate planning attorney to put those wishes onto paper with properly written and executed estate planning documents would be in order.

Also, what if that successful single person was living with a companion for a number of years? He or she may want to leave that person something even though they have no immediate marriage plans. Chances are you have read about the famous Swedish author Stieg Larsson who wrote The Girl With The Dragon Tattoo series of best selling books. Larsson, age 50, died of an unexpected heart attack in 2004. In Sweden, like California, his sizeable estate went by default to his father and brother because he had no will. Larsson’s living companion of 30 years, Eva Gabrielsson, received nothing and there has been a nasty and expensive estate battle ever since. If someone who is single and successful wants to avoid that type of scenario, all the more reason to see an estate planning attorney.

As to the Power of Attorney, a single person may want to choose for their agent someone who is a companion or non-relative to make decisions and who lives close to them to be their agent for financial affairs. He or she may not want a family member involved. That makes more sense if someone lives miles away from aging parents. Sometimes there are various degrees of estrangement between parents and children. This is another topic that should be discussed in depth with an estate planning professional.

As to an Advance Health Care Directive, the single person may again want to choose for their agent a non-family member who is geographically nearby and has the time and patience to perform what could be a lengthy process. That person may be more in tune with the principal’s health care wishes than a family member.

Finally, if a single person already has estate planning documents, those documents should be reviewed periodically to make sure one’s wishes are still the same. At the same time, other life circumstances can change. For example, if a single person was planning to leave 20% of his or her estate to a sibling but that sibling later marries a wealthy partner, that may trigger a change.

Of course, life changing events such as marriage and having children will dramatically affect the single person’s estate planning portfolio.  Please give me a call if you have any questions.