Unmarried people should know the importance of a thorough estate plan
Preparing for the end of your life is one of those things you know you should do, but have you done it? According to a recent survey by Caring.com, a senior living referral service, only 4 in 10 American adults have a Last Will and Testament or a living trust. Maybe you are one of those 6 in 10 who have failed to prepare and have done no estate planning to help yourself, or your friends, or your loved ones because you have no idea what to do or you mistakenly believe that estate planning is something that only married people with spouses or children must worry about.
Of course, the opposite is true. Unmarried people need even greater estate planning than married people for many reasons. For example, they lack a readily available spouse to make important medical and financial decisions if they become incapacitated. They lack readily identifiable people to automatically inherit assets when they pass away. And finally, even though unmarried long-term relationships are occurring more frequently, neither of the unmarried partners of those relationships enjoy the rights and privileges that a husband or a wife do under current Missouri law.
Therefore, if you are single and do not have a thorough and effective estate plan in place, you should schedule an appointment with an experienced attorney to discuss your options immediately. And as for this article…it is especially written for you. Please read it front to cover in hopes it will motivate you to act. When meeting with your attorney, discuss your options including the following:
- If you remain single until your death, who will inherit your assets? While meeting with your attorney, make sure to discuss who your family members are. Under current Missouri law, if you never create a valid estate plan that includes at a minimum, a Last Will and Testament, and you are single at your death, your assets shall descend and be distributed in a process called “intestate succession.” Section 474.010 of the Missouri Revised Statutes (Missouri’s intestate succession law) describes the general rules of descent in a somewhat detailed process as follows: (1) If you die with children but no spouse, children inherit everything; (2) If you die with parents and siblings but no spouse or descendants (children), then parents and siblings inherit your intestate property in equal shares; (3) If you die with parents but no spouse, descendants, or siblings, then parents inherit everything; (4) Finally, if you die with siblings but no spouse, descendants, or parents, siblings inherit everything. As you may have determined by now, when there are no children, disposition of a decedent’s assets can be very different from what most people expect and would want.
Because you are probably like most people and would prefer your assets be distributed in a unique way, such as leaving items to your parents, your siblings, your nieces and nephews, and/or to your favorite charity, leaving the descent and distribution to Missouri’s default intestate succession laws would totally ignore your true intentions. More importantly, as a single person, any wish to leave items to a friend, your longstanding girlfriend, or your longstanding boyfriend is totally ignored by Missouri courts pursuant to our intestacy succession laws because those parties are considered strangers to you under current Missouri law.
- Who will manage your finances and make your healthcare decisions if you remain single? Unmarried people must put a priority on developing an estate plan that includes not only the disposition of property at your death, but they must also prioritize securing powers of attorney that determine who will serve as an agent in times of need such as when you become incapacitated. Without these documents, when the single person is unable to make medical decisions or take care of financial matters, the lack of a predetermined agent may leave those decisions to Missouri courts or strangers. Even if you have a friend or family member who you presume would step up and assume those important duties, Missouri law would likely fail to recognize those parties. More importantly, vendors such as banks, residential care facilities and hospitals may refuse to collaborate with those unauthorized parties because your trust in them was never expressed in writing. The best way to avoid these uncomfortable and dangerous situations is to secure a durable power of attorney for healthcare and a durable power of attorney for finances with the assistance of a seasoned attorney.
If you do not wish to have a friend or relative take on these responsibilities, or if you lack any candidates for these important agency duties altogether, your attorney can help you locate a professional agent to fill these roles such as a local lender, an accountant, a financial advisor, an attorney, or a local public administrator. Finally, expressing your wishes in writing with an attorney helps avoid the stress and conflict that can arise when your loved ones disagree about your wishes or wish to act in ways that do not reflect your best interests.
In developing the durable powers of attorney, you should identify one original agent and one or more successor agents who are able and willing to take care of important decisions when you cannot. Thereafter, you should take care to collaborate with your attorney, lender, or financial advisor to set up your affairs so your agent can clearly understand your wishes. If time permits, discuss your plans with the agents and show them how you set things up with your attorney. Provide them a copy of your power of attorney or let them know where they can find whatever information might be needed.
- Should single adults have a Last Will & Testament or a Trust? It depends. Having a Last Will and Testament goes a long way to avoiding potential asset distribution problems so at a minimum everyone should have one. Yet, for some single adults, it may be advantageous to have most assets in a revocable living trust. Property in the trust avoids probate, and the terms of the trust guide friends and loved ones through the distribution process. A Last Will and Testament does not avoid probate. It instructs a court with competent jurisdiction on how to administer your assets in probate; therefore, anyone using a will should supplement it with nonprobate transfer agreements with transferring entities established prior to death.
If a revocable trust is used, it is important to transfer ownership of property to the trust prior to death and thereafter through non-probate transfers like payable on death and transfer on death agreements. Too often people have trusts drafted then fail to fund them through transfers of title and other funding conduct. The result is they have unfunded or “empty trusts” and the fees they paid to establish the trust are essentially wasted.
Another key estate planning issue for singles is the choice of an original personal representative and successor personal representative for the will, or an original trustee and successor trustees for the revocable living trust as there is no spouse to perform the role. There might be children, friends, or family members who can function as those trusted fiduciaries; however, it is always best to be initiative-taking and appoint successors upon execution of the documents. If no known party is available to serve or the testator or settlor lacks sufficient family member to act, it may be best to select a trusted advisor such as an accountant or attorney and have the trust or estate pay their published fees.
The unmarried population is increasing and marriages are failing at alarming rates. The growing number of unmarried parties face unique estate planning challenges and should seek out experienced attorneys for advice. Unmarried parties may revise or amend their estate plans more frequently than married counterparts because their situations are more fluid. It is especially important for unmarried parties to monitor their estate planning criteria and update documents as triggering events arise. Their fluid relationships and ever-changing family composition raise many concerns and the need for estate planning remains obvious.
Todd Miller is a monthly contributor and regularly writes and speaks on various legal topics including bankruptcy, estate planning, probate, and elder law. He formed the Law Office of Todd Miller, LLC, 1305 Southwest Blvd., Ste. A, Jefferson City, Missouri in 2006. He has been awarded the Substantial Contributor Attorney Award by the Missouri Bar and ranked as one of the “Top Attorneys in Missouri” by The Legal Network. Mr. Miller earned his juris doctorate degree from the University of Missouri School of Law in 1999 and graduated with honors from Lincoln University in 1991. You may find him at www.toddmillerlaw.com (573) 634-2838 or on Facebook, Instagram, and Twitter.