There are huge differences between estate planning for a person with a family and one without a family. However, planning what you want to do with your assets and debts after you pass away is important no matter which category you belong in. Most people with no spouse or children think they do not need an estate plan, which is a huge misconception.
People with no families are usually busy building their careers, going on vacations, and spending money however they wish to. Estate planning can solve various problems that come with old age, such as retirement, incapacitation, etc. A New Jersey estate planning lawyer can tell you all about the importance of estate planning for singles.
Estate planning for singles: tips
- Execute a power of attorney.
A power of attorney is an estate planning document that is used while you are still alive but are not able to make financial and medical decisions for yourself. Since singles do not have spouses and children, you must make sure that you choose someone you can trust with such a big responsibility. However, after you die, a power of attorney won’t have any rights, so you will have to make a will as well.
- Set up a will.
Wills are some of the most important estate planning documents and are a must for everyone, whether single or not. An important component is a beneficiary. Just because you do not have a family does not mean you cannot transfer your assets to someone after you die. Make sure to update your beneficiary designations so your loved ones can reap the benefits. Without a will, the proceeds may not go to the right person.
- Create a revocable trust.
When you are alive, you should be the primary beneficiary of the trust who reaps the benefits. However, you need to name the beneficiaries before you die. You can name someone to whom you wish to give a source of income. Or, you could pass down the assets to your nephews and nieces. Remember that you also need to choose a trustee to manage the trust when you are no longer able to.
- Fund the trust.
Funding a trust is extremely important. If you find your trust while you are still healthy and earning, your trustee will be able to use those funds to take care of you later. Moreover, your family would have to go through probate, which is a time-taking and expensive procedure. If you wish to control the decision of who gets your assets, fund the trust now.