Do You Need an Estate Plan When You Don’t Have a Spouse or Children?

Estate planning in Huntsville, AL, isn’t just for the wealthy. Nor is it only for those with young children to provide for. However, the notion that you must have a large net worth and a family is arguably the greatest misconception surrounding estate planning in general.

Determining how your property and assets — no matter how big or small — is essential to estate planning regardless of your marital status. But your estate plan will look a little different if you don't have any heirs. 

More importantly, being single doesn’t mean you don’t need to have an estate plan to protect your assets. After all, you never know what the future may bring, and there’s plenty you’ll need to consider along the way. 

For example, who will get all your stuff if and when you die? What happens if you become mentally incapacitated? What will happen to your pets if you own any?

If you’re single and wondering how to go about estate planning, keep reading — this article’s for you.

The Purpose of Estate Planning

What exactly does it mean to have an estate plan? 

Well, it’s all about protecting your assets while you’re still alive and after you’ve passed on or have become mentally incapacitated. The goal is to protect your assets, such as your money, property, car, personal belongings, collectibles, intellectual property, and anything else of value that may contribute to your overall net worth.

Aside from wills, several other documents are involved in estate planning to ensure that your assets are secure from the probate court, creditors, liens, and any estranged family members or even business partners who may feel you owe them something.

For example, several types of trusts ensure your assets are transferred to a specific person or entity. There are also documents such as powers of attorney (POAs) to temporarily transfer the decision-making power to another trusted person in the event that you become mentally incapacitated and cannot make financial, business, or medical decisions on your own.

Therefore, the primary purpose of estate planning is to protect everything you’ve worked for and everything you own or have an interest in.

Dying Intestate

Have you ever wondered what happens to your stuff when you die without an estate plan or at least a will?

This is referred to as “dying intestate.” When someone dies intestate here in Alabama, their entire estate — everything they own — will have to pass through the Alabama Intestate Succession laws.

In a nutshell, this means that your entire estate will be turned over to the local county courts to go through the probate process. Here is where all your assets will be divided up and distributed according to the terms of Alabama’s intestacy laws.

Usually, when this happens, your spouse is the first person to legally inherit assets along with your children. From there, the rest goes to your other closest relatives, such as siblings and parents. But, of course, it’s much more complicated than it sounds — especially when minor children are involved.

What Happens When You Have No Heirs

If you die intestate with zero heirs — including any living relatives — you’ll have no control over what happens to your estate once you’ve passed away. This means your property, personal belongings, bank accounts, cash, and anything else you own or have an interest in will become a matter of the state.

Essentially, your entire estate will become the property of the state, and the rest is history.

Estate Planning Tips for the Single Individual

Regardless of heirs or living relatives, you need to have an estate plan if you have assets. After all, do you really want all your money and valuable possessions just going to the state to do with what it sees fit?

Luckily, as a single individual, estate planning is much less complicated. You don’t have to worry about fairness in distributing assets among heirs or about dissolving previously created documents involving an ex-spouse. All you must worry about are the basics and figuring out where you want your assets to go when you’re gone or what you’d like to happen should you become mentally incapacitated.

Here are the most important elements you’ll need to consider for your estate plan as someone with no heirs:

Figure Out Who Will Be Your Executor

The first order of business for any successful estate plan is to decide who will manage your estate plan once you’ve passed on. Essentially, this person will be named in your will as your appointed executor, and they will be the person that follows through with your instructions to ensure that your assets are distributed properly. 

If you create any trusts, you’ll also appoint a trustee to manage the assets within those legal documents. 

More importantly, you’ll need to choose someone you can trust to carry out the provisions of your estate plan. They should also be able to do so, meaning they’re willing, able, and responsible.  Therefore, you’ll want to speak with this person before appointing them since they’ll also have to agree to the responsibility.

If you don’t have anyone you feel you can trust to execute your estate plan properly, you can always appoint your Huntsville attorney for the job.

Figure Out Who Will Make Decisions on Your Behalf

Don’t forget that estate planning isn’t just planning for your passing. Other events can occur, leaving you mentally or medically incapacitated and, therefore, unable to manage your regular affairs.

This person is referred to as your power of attorney (POA), and you can select a different POA for each affair that needs managing or one to manage several.

Choosing someone to step in on your behalf to make decisions regarding your financial, business, or medical affairs is arguably more important than choosing an executor for your estate. This person must represent your best interests and be willing to advocate for you, which means they also need to be someone you can trust and are willing to take on the responsibility. 

Decide Who You’d Want to Get Your Stuff

This component of estate planning is actually a two-step process. The first step is taking an inventory of your tangible and intangible assets to figure out their worth and what you want to happen to them should you die unexpectedly.

For example, there’s your house, and then there’s your intellectual property, such as digital documents. You may want your home to go to a sibling and your personal documents destroyed. 

You’ll need to figure out what will be kept and what can be deleted or thrown away. Once you do, you’ll need to be explicit with these instructions in your last will, so your executor knows what to do and has all the information to do it.

Next, you’ll want to think about who will get what. Start by making a list of friends, family, and even friends’ kids that you would want to inherit certain things from your estate. Then match them up accordingly and put the instructions in your will or create a trust to transfer ownership directly (and to also avoid probate).

Think About Any Charities You’d Like to Support

It’s actually very common for people without spouses or children to leave money to their favorite charities. However, we should mention that if you plan to do this, it may be more advantageous tax-wise to do this while you’re still alive, as it can help you maximize your deductions.

You can also create a charitable trust fund with a certain amount to be distributed to your favorite charity over a certain period. The goal here is to be generous without hitting the organization you choose with a huge tax bill, which is something your Huntsville attorney can help you with.

Make Sure Your Pets Are Provided For

Our pets are like family to us; the last anyone wants is to see more of our furry friends end up in shelters, sad and alone. So, if you’re single and you have a pet, it’s your responsibility to ensure that they’re taken care of after you’re gone.

Obviously, it’s important to choose someone who will willingly take them in and care for them the way you would have wanted. However, aside from choosing someone to welcome them into their home, it’s a good idea to put money into a trust to ensure that they’re provided for. After all, pet care can get expensive.

There’s no way to tell what the future will bring. However, you can gain peace of mind knowing that your estate will be managed appropriately if you pass on — even without any direct heirs to inherit your things.

Don’t wait to plan your estate. Instead, get in touch with Sarah S. Shepard or another Huntsville estate planning attorney today to get the ball rolling so you can relax knowing that your affairs and assets are covered.