Many discussions about estate planning revolve around couples and families. Yet a large percentage of Americans are single. Some are divorced, others are widowed and still others never married.
Single people may want to adopt estate planning strategies that differ somewhat from those a married couple would use, depending on the situation.
For example, an increasing number of married couples are moving away from the strategy of gifting major assets to friends or family members during their lifetime, because the combined exemption for federal estate taxes now exceeds $10 million. But a single person with assets over $5 million may want to gift some of those assets during his or her lifetime in order to avoid hefty federal estate taxes.
It is important to point out that the recently widowed may want to use any unused portion of their deceased partner’s exemption. Individuals in this situation should contact an estate planning attorney to determine if there is a benefit to doing this and, if so, how to do it.
It is especially important for unmarried adults to prepare an advance health care directive. While hospital staff members defer to a spouse in an emergency situation, they increasingly will not allow parents, children or other interested parties to make medical decisions without written permission.
The most important piece of estate planning advice remains the same for single people and married people alike: it is vital to have an estate plan that covers both what happens in the event of incapacitation and after death. Without one, the state can and will make all of the decisions, and the results are unlikely to correspond to what an individual would have wanted.