Young & Single? You Need an Estate Plan Too
Every February 14th, the stores line the isles with beautiful floral bouquets and packages of chocolate indulgences of all kinds. Marriage proposals are planned, reservations are made at fine dining establishments, and love notes are written. To be sure, not all couples care much about Valentine’s Day, and certainly plenty of singles aren’t the least bothered by it – some even find it a great excuse for a fun evening out with friends. But there’s no denying that not everyone looks forward to this annual love fest. For some, it’s just a reminder of a relationship lost or the longing for one. A single friend jokingly shared the Happy S.A.D. Day acronym with me…”Single Awareness Day”. She’s got a great sense of humor!
So what in the world could this possibly have to do with estate planning, you ask? Simply that there seems to be a common misconception among the young and single that they don’t need to worry about that sort of thing until they’re older, wiser, richer, married, have kids, etc. You get the idea. If you fall into this category, you need to know that neglecting to plan can have some big ramifications – often for the people you love most – in fact, by taking the time to plan, you’re really looking out for them.
There are two sides of estate planning – the side that impacts you while you are still living, and the side that impacts your loved ones after your death. Consider the following an overview of the core documents you should have.
3 Key “Lifetime” Documents
Your estate plan will include documents your loved ones will need to care for you if, for example, you are in a serious car accident and unconscious. Your Medical Power of Attorney with HIPAA Release ensures that the person you trust to speak for you and make decisions for you has the authority he or she needs to do that. Your Durable Power of Attorney will allow the person you trust with financial matters to make sure that your finances are kept in order and bills are paid. Finally, your Living Will or Advance Directive provides you with an opportunity to determine end of life matters – specifically the kind of medical treatments you do or do not want when you are terminally ill, in a perpetual vegetative state, or facing imminent death. Stating your preferences in advance is more than just about you receiving the care you desire – though that is central to the document – it is also a document that may be crucial in preventing family disputes that could lead to much heartache, and even litigation.
Primary Legacy Document
When you plan, you leave a legacy of love to the people you care about. Your Will is the cornerstone of your estate plan, and it’s powerful – it takes the control over the distribution of your assets out of the hands of the state, and lets you call the shots. Do you know who would get your assets if something happened to you today? It may not be whom you think, or whom you’d want. Just ask James Dean.
Estranged parents who abandoned a child have nonetheless be known to receive a windfall inheritance at that child’s death for a simple lack of planning. A famous example is when James Dean, the iconic movie star of the 50’s, died without a Will. Unmarried and without children, intestate law dictated that his parents were the proper heirs of his estate. But the sad family history of his father sending 9-year-old James away to live with relatives in Indiana after his mother died of cancer, and never having much of relationship thereafter, makes one wonder: would James have wanted that outcome?
Making a Good Thing Last
Once you’ve got an estate plan in place, don’t make the mistake of letting it grow stale.
Many of you may remember when Marlin’s pitcher, Jose Fernandez, was killed in a fishing boat accident off Miami Beach last September. At 24, Jose was certainly young (and single, too), but his wealth as a major league baseball player had prompted him to do some planning. He had taken the time to create a trust in which his beloved mother would be the beneficiary at his death. However, in the time between creating the trust and his tragic death, Jose learned that he would be a father. He was not married to the mother (his girlfriend), and he had not changed the terms of his trust to provide for his future daughter, Penelope.
Assuming Jose would have preferred a portion of his estate was secured for Penelope, what do we learn? It is so important that you keep your plan current. As life circumstances change, your estate plan will often need adjusting too. While Jose was responsible enough to put a plan in place to care for his mother, he failed to keep that plan updated to reflect the addition of one very important beneficiary – the child that he was, by all accounts, so excited for.
Remember – you may be young, you may be single, but don’t be too carefree! You need an estate plan too.