Why Single Seniors Are Most in Need of an Estate Plan
As a person enters his/her retirement years, unexpected and significant shifts in his/her social circles, both core and extended, occur more often than many people think. Moving to a new place, the death of a spouse, and divorce are all issues that can drastically alter a person’s support system and financial resources. In this situation, it can be easy to assume that reevaluating an existing estate plan or creating a new one is unnecessary, because the close ties one normally leaves his/her possessions to are no longer in the picture. This assumption can be especially tempting for those without children to inherit. However, inaction could lead to a distant, unintended relation receiving the benefits of your lifetime of work and sacrifice. In fact, a recent poll of unmarried individuals in the U.S. found that 19 million Americans over the age of 65 are single due to death, divorce or lack of marriage. Estate plans do not need to be overly complicated, and the execution of basic documents to provide a clear chain of succession and post-death instructions can make the settling of one’s estate much simpler, less expensive and more controlled. A discussion of the estate planning strategies particularly relevant to single seniors will follow below.
Deciding Whom to Bequeath Property to
When a person is single, deciding who to list as a beneficiary or heir may not be as straightforward, and this could be an opportunity to consider other options for distributing property after death. Close friends and extended family members are certainly good choices for those deserving of one’s property, but it may be worthwhile to consider using some portion of the estate to make charitable donations to institutions, such as an alma mater, church, medical research or many other options that have some personal meaning.
Wills vs. Trusts
The simplest form of an estate plan is a basic will that sets out clear-cut property distribution guidelines, and names a personal representative to settle the estate. This simple document may be enough for many people, but wills must go through probate, a court process, which makes the will’s contents and the related proceedings matters of public record. It also adds time and expense to the process. In some situations a revocable trust could be a better option because it keeps the creator’s intentions private, it is typically less expensive to administer than a probate proceeding, and it enables more flexible distribution arrangements. These points may be particularly important if a person wants to distribute assets to non-traditional beneficiaries.
Powers of Attorney
In addition to a document that addresses property distribution, everyone should have a durable power of attorney that transfers authority to a designated person to make decisions related to one’s property and finances. A very important attribute of a durable power of attorney is that it will remain in effect even if the creator becomes incapacitated. This may alleviate the need for the appointment by the court of a legal guardian. The designation of a healthcare surrogate is another means to insure that someone you trust will be able to make important medical decisions if mental/physical incapacity strikes.
Insurances, IRAs and the Like
Accounts that pass to a beneficiary via contract, such as life insurance policies, retirement accounts and financial accounts, are completely separate and unaffected by the contents of a will or trust. Removing an ex-spouse as the beneficiary is important to ensuring he/she does not inadvertently retain rights to the proceeds is critically important as Florida law may not void these designations in the event of a divorce.
Changes and Updates
As friends and circumstances change, it is important to review and update these documents as necessary, so that they accurately reflect the creator’s present intentions. Depending on a person’s age and health, reviewing for updates every five years is a good benchmark, but an estate attorney can best advise how often this process should occur.
Get Sound Estate Planning Advice
If you are approaching or in your retirement years, and have questions about estate planning, you need an estate attorney that knows the unique needs of older Americans looking to protect and distribute their hard-earned assets. Attorney William Rambaum, P.A. has decades of experience in estate planning, and specializes in elder law issues. If you live in the Clearwater or Oldsmar areas, contact him to schedule an appointment.
Resource:
prnewswire.com/news-releases/update—-us-census-bureau-facts-for-features-unmarried-and-single-americans-week-sept-18-24-2016-300318929.html