Estate Planning - Will You Live Forever?

Single people without kids often think they will live forever.

Are you single with no kids and approaching retirement? If so, you probably have not given much thought to estate planning. You may have been busy building your career, socking away money and enjoying your time off with weekends away and exotic vacations. As you inch closer to retirement, it’s time to seriously think about your estate plan. Here is what it should look like.

Key takeaways

A will spells out how you want your estate distributed after your death. Without a will, state law will determine the order of inheritance.

Make sure to have documents in place to specify who can make financial and medical decisions on your behalf if you are incapacitated.

Check that the beneficiary designations on your life insurance, retirement,and bank accounts are in line with your wishes.

Of course, people arrive at their singleness in different ways, whether it's through widowhood, divorce, or never having been married. Some singles have children, while others do not. There's no one estate planning solution for every single person.

Take time to make an estate plan

Many people assume that estate planning is for married couples, because couples have spouses who rely on each other, or because couples need to make contingency plans for the care of minor children. Singles, on the other hand, may not need a will to provide protection for another person. Instead, they need to focus on their own protection and lay the groundwork for allowing someone else to make financial and medical decisions on their behalf, if they are not able to do so. In addition, they may need to spend a bit more time thinking about where their assets would pass at death, because there may not be a clear set of beneficiaries (like a spouse or children).

Put in place a power of attorney and health care proxy

Powers of attorney for financial affairs appoint someone to act on your behalf if you become incapacitated, and are an important component of estate planning for single people. Without these documents, a court would need to appoint someone to handle important financial decisions for you. That could delay access to bank and investment accounts and make it difficult to access the money needed to pay bills.

A medical power of attorney, also known as a health care proxy, is a good starting point for making sure you have designated someone to act on your behalf to make medical decisions. This spells out precisely what types of interventions you agree to if you are not able to communicate your wishes. These documents must be in place to allow someone of your choosing to help medical personnel carry out your wishes.

Identify your heirs

For married people, spouses and children are natural heirs. A will is a must for anyone, because if there is no will, the probate court will rely on state law to determine the order of inheritance.

In addition to a will, make sure to have the right beneficiary designations on your life insurance, retirement, and bank accounts to reflect your current wishes. If you were previously married, your ex may still be a beneficiary of some accounts. Or you may have named a friend with whom you are no longer in contact. Those designations override any instructions in your will.

Tip: Consider setting up a revocable trust so your heirs can avoid probate, which in some states can be an expensive and lengthy process. Read Viewpoints on Fidelity.com: 6 reasons you should consider a trust

Update your estate planning as needed

Having an updated estate plan can help ensure that everything you worked so hard for is distributed to the people, charities, and organizations that mean the most to you.