Tuesday, December 6, 2011

Why Single People should do Estate Planning

If you are unmarried and don’t have children you may think that “estate planning” is unimportant to you. Many singles believe that estate planning is only a concern for married couples or people with children or people who are very wealthy. But this is not true. Single people of modest means can benefit from forethought and preparation for the future – a future that someday may involve their incapacity and will certainly include their death. 

Most people think that estate planning only involves signing a will and taking other steps to ensure that upon your death the things that you own pass to the right people, in the right manner, at the right time. But it’s much more than just planning for death.

Estate planning also involves planning for possible future incapacity though the use of tools like powers of attorney and health care directives. These legal documents will help you retain control over your affairs in the event of your temporary or permanent incapacity so that the decisions that will be made for you will be the ones you want made, and the person making the decisions will be the person you choose. 

Although you may not be aware of it, you already have an estate plan - because the government has prepared one for you. The government plan is your default – it governs what happens if you don’t take the time to plan for yourself. Here is what the government plan does:

  •  It says who is authorized to make health care decisions for you if you get sick and can’t make your own. It also specifies the kinds of decisions this “representative” can make on your behalf.  The authority granted under Pennsylvania law (Act 169 of 2006) is very broad.  If you don’t want that family member who never liked you to have the authority to “pull your plug’ you should probably take the time to create a Health Care Power of Attorney.
  • The Government plan says that a court will decide who will be given authority to handle your financial affairs if you are no longer able to manage on your own. A Judge will decide, based on limited facts, perhaps after a court  hearing that lasts only a few minutes, to turn all your finances over to someone. If you don’t want to leave your financial fate to a Judge and appointed guardian, you should take the time to create a financial power of attorney. Your financial power of attorney document will authorize the person you choose to step in for you and it will state the amount of authority they will have, and won’t have. 
  • Your Government plan says who will be in charge of distributing your money, property, and personal belongings when you die. It also sets up a default list of people who will get your stuff. If you are unmarried and have no children, this can get very complicated and confusing, and people who you didn’t like (and perhaps didn’t even know) can wind up with your money, property, and special personal items. If this doesn’t sound good to you, you need to take the time to create your own Will.

If you are single, you can stick with your government estate plan or you can opt out of it and create your own. But, unless you can figure out how to live forever and in good health, your estate plan is likely to someday become very important.  

This blog and the Marshall, Parker and Associates website have a number of articles that can get you started on the job of preparing your own financial power of attorney and health care directive.   Of course, these documents are too important to your future to be "do it yourself."  See a experienced elder law and estate planning lawyer to make sure you get things right.   

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