[This post is Part One in a four-part series discussing estate planning for Millennials. You can find links to the other posts in the series here.]
I'm single with no kids. Do I need an estate plan?
The short answer: yes.
Having an estate plan is a good idea no matter your family situation. But when you are single with no children, planning is all the more important to ensure your wishes are followed.
While the law provides clear “default” options in some areas when you are married (e.g., spouses often have the ability to get certain medical information), those defaults are not applicable when you do not have a spouse.
For that reason, it is important for single adults to consider both sides to estate planning: What happens to your STUFF when you die and who takes care of your SELF when you become incapacitated.
What will happen to my STUFF?
Every state has a framework (called "intestacy laws") essentially providing an estate plan by default.
In Oklahoma, for instance, if you are unmarried and have no kids, the law says that, unless you have an estate plan directing otherwise, your estate will go to your parents or, if they are deceased, to your siblings in equal shares. End of story.
That might sound fine to many people. However, intestacy laws are rigid and do not take into account other desires you may have for your property. For example:
Do you want to benefit one sibling (or other heir, as the case may be) more than another?
Is there a particular relative you do not want to inherit from your estate?
Are there any specific personal items you want to leave to friends or loved ones?
Do you want to leave any of your estate to charity?
Do you want to provide for a niece or nephew's education?
What will happen to your online accounts?
Without an estate plan, there is no guarantee that your wishes with respect to any of these questions will be followed.
Even if you are confident that your family would abide by any informal wishes you leave behind, doing so could result in adverse tax or other legal consequences to them.
Related post: Estate and Gift Taxes Explained
At minimum, you should have a Last Will and Testament to direct who will receive your assets upon your death. But remember: A Will still has to go through probate before your beneficiaries can receive that you left them.
Alternatively, you can save your family the time and expense of probate (and give yourself a greater degree of flexibility and privacy) by creating a Living Trust.
Related post: What’s the Difference Between a Will and a Trust?
There are other ways to leave your estate to friends or loved ones, but Wills and Trusts are by far the most robust. The important thing is to have a legally enforceable document stating who will get your assets.
What will happen to my SELF?
In addition to guaranteeing that the right people get your STUFF, it is even more important to ensure that the right people can take care of your SELF when the need arises.
Who do you want making medical decisions for you if you are unable to do so?
Who do you want to be able to manage your assets and finances?
Do you want to stay on life support as long as possible? or would you prefer to have life support removed if it is not going to improve your quality of life?
Is there anyone you don’t want to be able to make decisions for you?
If you are in an accident and become incapacitated (partially or totally), no one would have authority to act on your behalf. That might seem obvious, but many people do not think about what it means.
Because if you cannot act for yourself and no one has the legal authority to act for you, there is only one way for someone to get that authority: a guardianship.
Someone would need to initiate guardianship proceedings over you even to do simple things like sign checks, file insurance claims, apply for government benefits, or talk with doctors.
That is why we recommend having a Durable Power of Attorney. Generally speaking, a power of attorney gives someone (your "Attorney-in-Fact") the ability to act for you in financial and/or medical situations.
Related post: Durable Powers of Attorney: Explained
A Durable Power of Attorney can be limited and grant your representative only certain powers, or it can be broad, allowing them to do pretty much anything and everything you could do yourself.
Having a designated Attorney-in-Fact with expansive powers can avoid the need for a costly, burdensome guardianship.
However, it is important that you trust the person you give such broad powers to. If you don’t trust someone to have that authority, then a court-supervised guardianship may be preferable. Even then, you can include in your Durable Power of Attorney (or in a separate document) a Nomination of Guardian stating who you would want to serve as your guardian, if a guardianship becomes necessary.
There are some things, however, that a Durable Power of Attorney cannot do. When it comes to expressing your wishes for end-of-life care, you need an Advance Directive for Health Care (sometimes known as a Living Will).
An Advance Directive serves two unique purposes. First, it allows you to state your preference for the use of certain life-sustaining treatments under certain conditions.
Many people are concerned about signing a document that allows someone else to “pull the plug” on them. But an Advance Directive only addresses very specific circumstances.
For example, you can provide that, if you are in a coma, you do not want to remain connected to any life support that keeps your organs functioning but that you do want a feeding tube and fluids.
Or you can state that if you have an end-stage condition (e.g., Alzheimer’s), you do not want your life to be unnecessarily prolonged by any form of life support.
Second, an Advance Directive allows you to designate someone to serve as your Health Care Proxy, which is the person with authority to communicate and carry out your wishes concerning life support.
This representative is similar to an Attorney-in-Fact appointed under a Durable Power of Attorney, but an ordinary Attorney-in-Fact does not have this power under Oklahoma law. Health Care Proxies are specially granted this authority by statute.
Related post: What’s the Difference Between a Will and a Living Will?
For more information about Advance Directives, see my Definitive Guide to Advance Directives that goes into much greater detail on this estate planning document.
What else should I have in my estate plan?
Formal documents are necessary parts of any estate plan. And while they can help eliminate legal barriers to ensure your wishes are followed, they do not address everything that needs to be done after your death.
This is where an estate planning Letter of Instruction comes in.
Even with simple estates, there are a thousand things your representatives will have to do to settle your affairs. A Letter of Instruction is a compilation of all the information that your representatives may need.
What estate planning documents do you have, and where are they stored?
At what institutions do you have financial accounts?
How do they make a claim on your life insurance policy?
What family or friends should be notified of your death?
What subscriptions or services need to be canceled?
What automatic donations need to be halted?
Where do you keep the key to your safe deposit box?
What is the password to your cell phone? Your laptop? What important files or information do you have stored on those devices?
What other information might be necessary to settle your affairs?
Leaving these instructions can make it much easier for your representatives to properly manage your estate after your death.
Related post: 3 Magic Ingredients in a Great Letter of Instruction
It’s hard enough for you to figure out all this information while you are alive—and you’re the person best situated to do so. Think about how much more difficult it would be for someone else to have to figure out this stuff after your death!
In addition to writing a Letter of Instruction, I also recommend having a family meeting or estate planning “fire drill" to let your loved ones and representatives know the basic contents of your estate plan or your other wishes relating to your estate.
How is anyone supposed to know about your estate plan unless you tell them about it? Even if they already know about your estate plan, you can make things easier on them by giving them some idea of what to do after your death.
Lastly, and this is especially important for Millennials, I highly recommend creating a digital estate plan detailing how your digital assets and online accounts should be disposed of after your death.
Do you have investments through an online service or a phone app like Acorns or Robinhood? Do you have cryptocurrency? Do you have unused Amazon credits, unused credit card points, or unused gift card credits on any other websites?
Often just as important as digital assets with financial value, many people have digital assets with enormous personal/sentimental value.
Do you keep a journal in a Word document on your computer? Do you store treasured family photos and videos in Google Drive or Dropbox? Do you have all your favorite music stored in your iTunes? Have you scanned important articles, letters, cards, or other memories onto your laptop or uploaded them into the cloud?
If no one knows about these digital assets or how to access them, they will most likely be lost. A digital estate plan can simply be a document by which you let your representatives know which websites to visit after your death, what action should be taken (e.g., “Download all of the files in the “Family Memories” folder of my Google Drive, and give them to my brother. Then delete my account.”), and how to take the action you have specified (e.g., provide usernames/passwords, security question answers).
Related post: Estate Planning in the Digital Age
Depending on the laws in your state, you may need to appoint a "digital executor" in your estate planning documents (usually a Will or a Trust) for this purpose.
Start the Estate Planning Process Now
When you are young and single, it can be easy to think that estate planning can wait for the future—that perhaps you will never need it at all. But the reality is that no one is guaranteed tomorrow.
Regardless of where you are in life, it is important to think about the future and about the legacy you want to leave behind. I guarantee you: An estate plan is not something you will regret having. It’s only something you can regret not having.
To get more information and find out what kind of estate plan might work best for you, call the Oklahoma City estate planning attorneys at Postic & Bates for a free, no-obligation consultation appointment.
David M. Postic is an attorney at Postic & Bates, P.C. His practice focuses on estate planning, probate, real estate, trust administration, business planning, and adoption.
You can email David through our Contact Us page or by calling our office at (405) 691-5080.
[As with all our blog posts and other publications and resources, the contents of this article do not constitute legal advice and are subject to our site-wide disclaimer.]
