Estate planning is not just for those with spouses and children.
You are single.
You are strong and independent.
You are used to doing everything for yourself.
You cannot wait around for someone else to take care of the dishes or laundry.
According to a recent Forbes article titled “5 Financial Planning Strategies For Singles,” you have to take initiative with your own financial and estate planning as well.
What can you do?
Social security will help a little.
You may even have a small pension.
But you will need more than this to give you retirement income.
How do you get this?
Create a plan for saving.
A good goal is to save 15 percent of your salary and include an employer match if you have a 401(k) plan at your work.
Even if you do not have a 401(k) at work, you still need to save.
Set up a personal IRA.
Expect the unexpected.
You cannot rely on the income of a spouse to get you through an emergency.
This means an "emergency fund" is more important for you than your married counterparts.
How much should you keep for times like these?
You should save enough to cover at least three months of expenses.
Ideally, it will be closer to six months.
You will not want to dip into retirement funds or incur credit card debt.
These emergency funds should be liquid so you can access them easily.
If you do have dependents, life insurance will help provide for them if you were to pass suddenly.
If you have no children, you may still want to consider a policy to cover funeral expenses.
Do your estate planning.
When it comes to estate planning, the greatest lie you could believe is that singles do not need estate planning.
If you will need an advance health care directive (i.e., a health care treatment directive, durable power of attorney for health care decisions and an anatomical gift declaration) and a general durable power of attorney for legal and financial matters.
If you were to become incapacitated, you would need someone to make health care and financial decisions on your behalf.
If you have minor children, you will want to designate a guardian in a will.
You will also want to make certain your beneficiary information is updated.
Yes, you can designate asset beneficiaries in your will.
But not all assets pass through your will.
For example, life insurance policies and retirement accounts are designated within the policy itself.
You can also set up accounts to transfer on death directly as you select.
Although you are single, you certainly should not undertake this alone.
Work with an experienced estate planning attorney to create a plan to meet your specific situation.
Do not forget to inform your loved ones of your plans.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").
Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Forbes (July 5, 2017) “5 Financial Planning Strategies For Singles”