Are you single? Childless? Yes, you still need an Estate Plan!
Many people think that Estate Planning is only important for those with spouses and/or children. However, Estate Planning is also very important for those who are unmarried and do not have children. Why? Because Estate Planning involves more than just planning for what happens to your assets when you pass away; it also allows you to plan for potential incapacity and allows you to provide clear directives about your healthcare wishes.
Many people are marrying later in life (if at all), and many people either choose not to or are unable to have children. If you are unmarried or childless, planning for potential incapacity and providing healthcare directives are especially important because you do not have the “default” people (a spouse or a child) who would “normally” be asked to help make decisions you should you become incapacitated or in need of emergency medical care.
If you are unmarried and/or childless, it is important to find a person you trust who can be your agent under a Durable Power of Attorney, a document that gives your agent authority to act on your behalf in financial matters should you become incompetent. And it is equally important to have a Living Will (which will direct the type of healthcare you wish to receive in emergency situations) and a Health Care Proxy (which will name an agent to make decisions for you according to the guidelines you establish in the HCP should you become incompetent). However, it may be challenging to think of a person you’d like to give medical decision making authority to if you are single or without a child. Choosing an agent (or agents) isn’t a decision to be made lightly; the person to whom you grant authority may be making end-of-life decisions for you and managing all your assets, so it should be someone you trust implicitly. You should also make sure they’re willing to take on this responsibility, and should help them understand your wishes so they are confident making decisions on your behalf.
If you are unmarried and childless, you also need to think about your assets and how you would like them distributed when you pass away. New York State has laws that will distribute your assets if you do not have a Will or Trust, but wouldn’t you prefer to control where your assets go? Without a Will or Trust, New York will direct your assets to your nearest next of kin (according to a hierarchy NYS has established). This may mean that your assets will go to some distant family member you don’t have a strong (or any) relationship with. There are a number of options for distribution of your assets, even if you do not have a spouse or children.
1. Outright Gifts to other family members or friends who you care about. This can be accomplished through your Will or a Trust. Certain types of accounts will also allow you to name a beneficiary and avoid the probate process altogether.
2. Outright Gifts to Charity: You can also give outright to a charity through your Will or Trust. These gifts can then be used as a deduction to lower the donor’s estate taxes.
3. Charitable Remainder Trusts: A charitable remainder trust (CRT) also provides tax benefits. A CRT is an irrevocable, tax-exempt trust created by the donor transferring assets to the trust. The trustee then invests the trust’s assets and pays the donor an income stream for a certain period of time. At the end of the donor’s lifetime, the charity keeps the remaining trust assets.
There are many factors that you need to consider in planning for your future (many more than explained above!) Seward & Seward has extensive experience helping clients plan for their futures. We would welcome the chance to sit with you to discuss your unique needs.
516-766-1415
Catie@SewardsLaw.com