What is the best investment you have ever made? It could have been stock options in a company, an NFT, an investment property, or a collectible item. As entrepreneurs, we think the most valuable investment you could make is to invest in yourself.
The return on your investment (ROI) of yourself will help you to enjoy the profits now as well as in the future. If you can’t trust yourself, who can you trust? This investment is not only for now but in the future as well. You might be thinking to yourself, but I am single and childless so how would I invest in myself? Create an estate plan.
Most adults don’t think about estate planning as often as they should, but just because you are single or childless does not mean you should not consider what happens to your estate when you are gone. On the contrary, you should worry more about ensuring you have an Estate Plan created for yourself.
If you are single without children, you could be confronted with issues that married couples with children don’t face. This is true regardless of your income level. Without proper planning of your Estate, you’re jeopardizing your own wealth assets, as well as putting your own health at risk. This doesn’t even include the mess that your family and friends might have to deal with if you unexpectedly die or become incapacitated.
Keeping this in mind, here are three reasons you should ensure you have an estate plan if you are childless and single.
- Who Will Handle Your Stuff ?
Regardless of your economic status, your assets (no matter how big or small) will need to be located, managed, and passed on to someone in the event of your death which is a huge undertaking for anyone. Imagine if your family or friends do not have any guidance or direction because you did not leave an Estate Plan with your wishes of who and how your Estate is to be managed when you are gone. This planning is something that most families are not prepared for on their own.
In fact, following a loved one’s death, American families spend an average of 500 hours and $12,700 over the course of 13 months (20 months if probate is required) to finalize the person’s affairs and settle their estate, according to the first annual Cost Of Dying report released this March by tech startup Empathy in partnership with Goldman Sachs.
On top of the logistical complications involved with finalizing your affairs, without a clear estate plan, including a will or trust, your assets will go through the court process of probate, where a judge and state law will decide who gets everything you own. In the event no family steps forward, your assets will become property of the state.
Can you think of any reasons to give what you created and earned to the state? You might think to yourself that you only have a little financial wealth. However, you might have collected some sentimental items during your life, or maybe you are involved with a charity, or what happens to your pet? Who will handle these when you are gone? Why would it be important to you to give these memorable items to your family or friends?
It is rare that someone dies without any family coming forward. Without a will or trust, state intestacy laws establish which family member has the priority inheritance. If you’re unmarried with no children, this hierarchy typically puts parents first, then siblings, then more distant relatives like nieces, nephews, uncles, aunts, and cousins.
This could be a devastating or maybe even deadly outcome for you. What if your closest relative is your estranged “former” addict sister who wants to stake her claim to your property? Or what if your loving nephew is your next of kin but is known for having the worst money management skills and drains your estate while you are unable to make any decisions because you are incapacitated?
What if your estate does contain some money and assets? You might not think it much, but the courts would say otherwise. This could lead your case to court, which would be costly and further strain your family. This is all because you think you did not need an estate plan.
As your lawyer, we here at Yolofsky Law can help you organize your Estate Plan and review your assets to help avoid family conflict and unnecessarily going to court. You can email us at [email protected].
2. Who Has Health Care Power?
Estate planning isn’t just about passing on your assets when you die. In fact, some of the most crucial aspects of estate planning have nothing to do with your money but are aimed at protecting you while you’re still alive.
Being proactive in your planning will help you to name the person you choose to oversee your medical care if you are incapacitated. This is done using an estate planning tool called the Healthcare Power of Attorney.
Let’s say you have a terrible accident. You are unfortunately incapacitated and without the ability to communicate with the doctor to give them your consent to proceed with risky medical treatment. A judge would have to decide what medical treatment is best for you if you don’t have this document created ahead of time.
On a personal note, a family friend’s girlfriend ended up in the ER due to a fall. While she was there the doctors discovered she had cancer, but the boyfriend could not make any medical decisions for her because they were not married, there were no documents in place, and her next of kin was her daughter in Italy. He was frustrated and felt helpless in this situation. Once she was on the road to recovery, he proposed, and they got married. The now-husband knew he did not want to risk being unable to help make medical decisions for the person that he loved ever again.
Your family members who have priority to make decisions for you could keep your dearest friends away from your bedside in the event of your hospitalization. Or family members who don’t share your values about the type of food you eat, or the types of medical care you receive, could be the one’s making decisions about how you’ll be cared for.
To address these issues, you need to implement an estate planning tool that provides specific guidelines detailing exactly how you want your medical care to be managed during your incapacity, including critical end-of-life decisions. This is done using an estate planning vehicle known as a Living Will.
Bottom line: If you are single with no kids, you need to create an estate plan to name healthcare decision-makers for yourself and provide instructions on how you want those decisions made should you ever become incapacitated and unable to make those decisions yourself.
“Good fortune is what happens when opportunity meets with planning.” – Thomas Edison
3. Who Has Power Over Your Finances?
As with healthcare decisions, if you become incapacitated and haven’t legally named someone to handle your finances while you’re unable to do so, the court will pick someone for you in a process called guardianship. The way to avoid this is by naming someone you trust as your Durable Financial Power of Attorney (DPOA).
A DPOA is an estate planning tool that gives the person you choose the immediate authority to manage your financial, legal, and business affairs if you’re incapacitated. This person will be your representative. They will have a broad range of powers that you grant them to handle things like paying your bills and taxes, running your business, collecting your Social Security benefits, selling your home, as well as managing your banking and investment accounts.
Without a signed DPOA your family and friends will have to go to court to get access to your finances, which not only takes time but could lead to the mismanagement (and potential loss) of your assets should the court grant this authority to the wrong person.
On the bright side, the person you name doesn’t have to be a lawyer or financial professional. It can be anybody you choose, including both family and friends. The most important aspect of your choice is selecting someone who’s completely trustworthy because they will have complete control over your finances while you remain incapacitated.
Risky Business
Don’t leave your life to risk by not having an Estate Plan for the benefit of yourself as well as your friends and family. At Yolofsky Law, we are here to help create your own personalized Estate Plan to suit your wants and desires the way you see fit. Give us a call at # 954-237-4011 or email us at [email protected] to schedule a conversation with us. It’s never too early or late to invest in your future.