When most people think about creating an estate plan, they are focused on the distribution of their assets when they pass away. But when you are unmarried and have no children – or even no surviving family members – you may be wondering about the importance of still having a comprehensive estate plan. It’s important to understand that estate planning is as important for single Californians as it is for those who are not single. But how should it be different?
Differences to Consider
There are many differences between single and non-single people when it comes to creating a comprehensive estate plan. One of the most prevalent things is the need for a power of attorney. While a spouse, children, or close family members are often needed to make important decisions on behalf of their loved one, when you don’t have such people to do so, you must consider who you would want to be making these decisions.
Powers of attorney may be used for financial decisions or healthcare decisions, but regardless of the type of document in question, you must consider who understands you the most and has a good idea of what you would want in a given situation. This is the person you should select to be your power of attorney. Should they accept, they will become your decision-maker should you end up incapacitated.
Choosing an Executor or Trustee
Another important consideration for single people is choosing an executor or trustee of their estate. This means choosing someone who will oversee the asset distribution and wishes of their will or trust. If you don’t choose someone, you have no say over who will be appointed executor and/or trustee and who will bring your will to probate court.
Tax Considerations
Unfortunately, single people can’t access the marital tax deduction, which would normally reduce their estate or gift tax. However, a single person can avoid paying a gift tax on lifetime gifts to others by using the annual gift tax exclusion, the individual lifetime estate and gift tax exemption, and the unlimited exclusions for gifts of education and medical expenses. It’s important to remember that the estate tax exemption is available so long as it isn’t used on lifetime gifts. There is an annual gift tax exclusion. In other words, there is a certain amount of money that can be used to make a gift to someone else. In 2021 this amount is $15,000. For individuals who don’t have children, these gifts are usually given to other relatives, such as nieces and nephews, or to friends. There is no requirement that the beneficiaries of these gifts be related to you.
Charitable Giving
If single people don’t choose to leave their assets to family members, many single people without children oftentimes wish to leave money to charities of their choice and make them significant beneficiaries of their estate. There are many different strategies for charitable giving that can help to save taxes.
Lastly, for many single people, there is a chance that they must update their estate plan more frequently than those who are married, as their situations may change more often.
Heritage Legal, PC Helps Californians to Create a Comprehensive Estate Plan
As the population of unmarried individuals continues to increase, so too does the importance of working with an estate planning attorney to combat related challenges and to protect interests.
At Heritage Legal, PC, we know how important it is to be sure that your wishes are fulfilled and those you care about are protected. We can help you to create a comprehensive that fulfills all of your wishes. To learn more or to schedule a free consultation, contact us today!