Put Your Plan in Order. Part 3: Basic Estate Planning for Single Adults and Simple Estates

Put Your Plan in Order. Part 3: Basic Estate Planning for Single Adults and Simple Estates

In my practice, I oftentimes meet with clients who are “apologetic” for taking my time given their perception that they “… really don’t have that much [in assets]” but have come to see me based on the encouragement from friends or relatives. 

All Adults 18 Years and Older Need Planning

The truth is that everyone age 18 or older has estate planning needs. Estate planning is not solely based on how much a person is worth. While a person’s net worth is relevant in the planning process, especially individuals with significant assets, the estate planning process addresses a wide spectrum of issues with lawyers using tools to help clients avoid problems, both when they are living and after they die.

For instance, young adults who turn 18 need planning in the form of power of attorney documents for funeral and medical affairs to appoint their parents or other adult(s) as their legal agents. When an individual turns 18, Mom and/or Dad no longer have “legal authority” over a child even if he/she lives at home. Parents can be surprised that in the event of a financial or medical emergency, they may not be able to give legal authorization to a financial institution or hospital in the event of a child’s incapacity.

Common instances and examples may include a young person away at college who is injured in an accident or becomes ill and is subjected to a court-ordered guardianship or conservatorship where a third party (many times a stranger) is appointed to have legal authority over a legally incapacitated adult and make medical and financial decisions for them. This can all be avoided by a young person executing power of attorney documents naming their parents as legal agents to act on their behalf in the event of their incapacity.

Planning an Estate Is More Like a Process Rather Than an Event

As life circumstances change so does a person’s estate planning needs.

Older, single adults also require planning. They have the same needs for power of attorney documents as discussed above as well as require some counsel on establishing a simple will and making sure their current beneficiary designations on employer-provided benefits like life insurance and 401(k) plans are listed correctly. Many “default rules” that govern in the absence of proper beneficiary designations or perhaps in the absence of a contingent beneficiary often lead to unintended consequences in the event of a young adult’s untimely death.

Similarly, young married adults, with our without children, also require careful planning. Establishing legal agents and power of attorney documents, designating beneficiaries on retirement plans and life insurance policies, as well as appointing legal guardians of minor children all need to be established in the proper legal documents. While the documents are oftentimes not complicated, carefully considering and making intentional decisions reflected in comprehensive legal documents will avoid various unintended circumstances like, for instance, a minor child’s inheritance being managed by that child’s aunt who may have a gambling addiction.

Middle-aged or older single adults and married couples also require planning. The same types of documents can be used as tools to address other potential problems like protecting a child in a bad marriage or a child with a substance addiction from receiving an inheritance without proper protections in place.

Always Be Cautious with "One-Size-Fits-All" Planning Tools

The old adage, “You don’t know what you don’t know” is relevant in estate planning matters. The most important task of any attorney in counseling a client – young, old, single or married – is to ask questions to obtain information in order to identify potential problems a client may not even be aware of before the interview. Although I know I am biased because I am an attorney, individuals need to be careful relying on template or fill-in-the-blank forms and Internet services to solve their estate planning needs. Estate planning documents like wills, trusts and power of attorney documents are well-known tools of the trade; however, improperly drafted documents or documents created with inaccurate information can sometimes be worse than not having any documents at all.

Why do you think any documents provided by online service providers have all those disclaimers that the service is not providing any advice and is only providing the legal forms?

As stated above, the documents in many instances are not complicated; it’s the advice and “process” that’s important to make sure an individual’s plan is properly drafted.