In California, if you pass away without an estate plan in place your assets will be passed via the intestate succession laws. If you are married, your assets will pass first to your spouse and children, if any, then to your parents, siblings and finally the state. If you are not married, your property passes to your children, if any, then to your parents, siblings and finally the state if no one else survives you. More often than not, the latter method of distribution is not reflective of a single individual’s wishes pursuant to the distribution of his assets. E.g. Co-habiting couples (unmarried) regardless of how long they lived together, will never have legal claim to each other’s estate without an estate plan in place.
Even if you’re not particularly concerned about the nuances of who receives what from your estate, Estate Planning still has advantages. For example, if a person without a power of attorney becomes incapacitated, the court will appoint a relative or even a stranger to act as guardian or conservator for the single individual as it relates to medical and financial decisions. Without some basic Estate Planning the single individual loses the opportunity to express their preference in this area.
To avoid the negative consequences of poor or inadequate planning, consider talking to an attorney about the following documents which can offer piece of mind for single individuals:
1. Durable Power of Attorney
A durable power of attorney is a document that enables you to designate someone to act for you in various situations including personal and financial instances, when you are incapacitated. A health event or another event could leave you incapacitated. It is important to have given thought to whom you would trust to act for you and have in place this document. If you do not, you run the risk of the court appointing someone to act for you.
2. Advance Healthcare Directive
Similar to the durable power of attorney, the advance healthcare directive enables you to designate someone to act for you and to make decisions on your behalf as it relates to medical decisions. By having in place this document you are ensuring that the court will not be petitioned by your siblings or parents for authority to make medical decisions for you in the event that you are unable to speak for yourself. Your wishes with relation to how you would like to be medically treated upon the occurrence of various situations can be made known through the execution of a tailored Advance Healthcare Directive.
3. Last Will or Revocable Living Trust
The intestacy successions laws may not necessarily represent your true distribution wishes for your property. Therefore it is important to document your wishes for the distribution of your property in either a living will or a revocable living trust.
The will is a basic Estate Planning documents where you can nominate a personal representative to settle your affairs pursuant to written instructions taking the form of the will. The will enables you to direct specific property to named individuals, charities or whomever you like.
The revocable living trust is another common Estate Planning instrument and while it’s most commonly used to avoid Probate, it can also be used to successfully dispose of one’s property pursuant their wishes. Revocable living trusts have many advantages over a last will, including the fact that they are harder to contest, maintain privacy and ensure for a smoother and quick distribution of assets upon ones passing.
4. Update Beneficiary Designations
As relationships change overtime, make sure you keep your beneficiary designations for your retirement accounts current with your situation. It is essential that these documents are reviewed upon the birth of a child or otherwise.
The many great reasons why single individuals should put together an estate plan are not limited to those outlined in this article. Contact an Estate Planning attorney for further information and ensure piece of mind for your future.