Being single affords more freedom, yet it is also crucial to consider potential situations where disability or illness makes managing personal affairs impossible. Although it is often associated with the affluent, aging adults or those with large families, estate planning is equally advantageous for unmarried individuals.
As an increasing number of people embrace the single life, estate planning plays a crucial role in safeguarding assets and ensuring personal preferences are honored. Here are three major ways estate planning can benefit single individuals:
Increases control over assets
Maryland’s intestacy laws dictate that if an individual passes on without a will, their assets will be divided among their relatives. Usually, the surviving spouse and children are first in line to inherit a decedent’s remaining assets, followed by their parents and, eventually, distant relatives.
With estate planning, an individual can command better control over their assets. Singles who draft a will or trust can choose to designate beneficiaries of their choice instead of allowing the state to decide. Beneficiaries can range from family members to friends or even a charity. This approach can provide them peace of mind, knowing they have entrusted their legacy to those they deem fit.
Establishes health care proxy
Estate planning is more than just securing financial assets. It is a legal process involving establishing health care decisions in case of incapacity.
When unforeseen events such as accidents or illnesses strike, a person may become unable to communicate their health care preferences. For those accustomed to living independently, the idea of relying on others may be challenging. Nevertheless, designating a health care proxy or agent can help guarantee that essential life decisions align with their personal preferences.
Minimizes estate tax
Married couples often benefit from estate tax exemptions that are not readily available to unmarried individuals when passing on assets. For instance, they can rely on lifetime gift exemptions to minimize estate tax or bequeath assets to a surviving spouse or child tax-free.
On the other hand, when a testator bequeaths assets to a beneficiary they are not directly related to, those inheritances can incur substantial taxes. Establishing a trust or employing other estate planning tools can effectively alleviate estate tax.
Estate planning isn’t exclusive to people with families or wealthy individuals. Instead, it is a practical legal process that can help individuals safeguard their legacy and personal affairs, regardless of marital status.