Estate Planning

Estate Planning Documents Every Single Woman Needs

Estate planning documents for single women

Estate planning is an essential part of anyone’s financial plan. I’ll explain in this article why it’s critical for single women.

If you don’t have a proper plan in place, your state’s laws will dictate who receives the assets under your estate. State laws usually designate beneficiaries in this order: spouse, children, grandchildren, parents, grandparents, siblings, aunts, uncles, nieces, nephews, and cousins. If you have children and die without a will, the state will decide who the guardian will be. This is all true even if you’re in a relationship without being legally married. 

Suppose you’re hoping to designate your possessions to a significant other, extended relatives, close friends, or charitable organizations. In that case, it’s critical to put together an estate plan. And more importantly, to appoint a person for your children’s guardianship, creating a will is a crucial step. Thankfully, this is easier than it sounds. The following is a list of primary estate planning documents and their purpose: 

Will or living revocable trust

Although these titles are often used interchangeably, wills and living trusts are two different documents. The most significant difference: both transfer an estate to designated heirs, but only trusts skip over the probate court. Plus, a will lays out your wishes for after you die while a living revocable trust becomes effective immediately and can be revised anytime while you are living. 

Suppose you are a woman with significant assets. In that case, a revocable living trust will keep your assets away from court-supervised distribution. If you have a more modest estate, a will may suffice.

A living revocable trust also helps your beneficiaries avoid the hassle and expense of a lengthy probate process. Living revocable trusts have benefits, but they cost more to create and require management. The choice between a will and a living trust is a personal one. Whichever path you take, it’s always a good idea to seek the advice of professional advisors. 

Healthcare proxy/durable medical power of attorney

As the name suggests, this type of power of attorney deals strictly with your health care decisions and medical treatments. With your healthcare proxy document, you’ll appoint an agent to make healthcare decisions on your behalf if you’re incapable of making them on your own. This is an important responsibility, and it’s essential to choose someone you trust and be transparent with them on the specifics of your wishes. 

The financial power of attorney

While the medical power of attorney or healthcare proxy deals with health specifics, the financial power of attorney deals with financial matters. Your financial power of attorney document grants another individual the power to make financial decisions for you while you are alive but not capable of handling things yourself.

Your power of attorney is your legal representative for financial matters. Should you be hospitalized or incapacitated, they’ll handle financial tasks, like managing your bank accounts and paying your bills from a designated account. You can choose to designate a power of attorney that is effective immediately or kicks in after a specific event occurs (ex. coma, Alzheimer’s, mental disability, or an inability to communicate your wishes directly). 

The Challenge Of Naming Representatives

It is one thing to get the will, living trust, financial and healthcare powers of attorney created. The other challenge is to decide who will be your legal representatives. Married couples usually name each other, but being single, you need to decide who will handle your affairs and find out if they are willing to do it. If you have a will, you will need an executor, and if you have a living trust, you will need a successor trustee. Then you will need to choose your powers of attorney for health and finances. Most people choose from personal relationships, but it’s also possible to hire professionals for these roles. As you are preparing to start your estate planning, besides organizing your financial assets, it’s just as important to decide who will represent you.

If you’re a single woman and want to talk about your estate plan with a trusted financial planner, please connect with us. We are here to help.

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Planning and Chance

The Bay Bridge. Photo by Michael Macor
The recent Bay Bridge closure is a reminder that life is short and fragile. Photo by Michael Macor

The moment I heard about the Bay Bridge near-catastrophe….I thought oh, my God, that could have been me, my husband, or any one of the many people I know and love who cross the Bridge regularly. As it turned out, I did know one of the people who was on the bridge that day.  Lucky for her – she walked away with 4 flat tires, a totaled car, and frazzled nerves – but she was alive.  We all admit that “life is short” but when we say this we are thinking of our normal life span and yes, it goes by too quickly. But life is also fragile and we have no control over so many things – including whether we’re driving on the Bay Bridge at the moment it collapses.

What we do have control over, is how we choose to live day by day, and also how we prepare for the inevitable day of our passing. There’s a reason why so many positive-thinking, self-help, spiritual guides suggest writing your own eulogy as a way to get inspired about how to live your life. This exercise forces you to think about how you want to be remembered….and if you are living that way now.  Many of us get caught up in the busyness of the day-to-day, and never step back to see if all that activity adds up to a life we are proud of.

Think for a second about those you’ll leave behind.  The kindest thing any of us can do for the people we love, who will inevitably be devastated by losing you,  is to plan and prepare. Execute a will and a trust. Decide who will be the best guardians of your children. Make sure the designated beneficiaries on your retirement accounts are up to date. See a financial advisor about life insurance- do you need it?  Let someone you trust know where the key to your safe deposit box is  and where to find the combination to your home safe ….store your important documents and make copies for a trusted friend or advisor.   Live lightly, when you buy stuff and store it, think about a loved one walking into a room or closet and having to decide whether to keep or toss, recycle or sell your belongings.

The Bay Bridge near catastrophe was scary and inconvenient but sometimes that’s what it takes to motivate us to make positive changes and to take care of business.

Take good care.

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