Being single, Jennifer McIntyre is used to plotting her financial moves on her own. In her late 40s, McIntyre left her job at Hewlett-Packard, where she worked for over 20 years in marketing and strategic planning, for what was supposed to be a brief hiatus to travel and explore other interests.
After reviewing her situation with her Fidelity financial advisor, McIntyre realized she was in a strong financial position. Instead of returning to paid work, McIntyre has been consulting with Boston-area nonprofits on a pro bono basis, including a long relationship with the global anti-poverty organization Oxfam.
"I might not be able to do what I do if I had the added expense of a family," she says.
McIntyre has applied the same can-do attitude to estate planning. As an "only child of 2 only children," she realized she would have to take extra measures to come up with an estate plan that gave her independence and reassurance.
"From very early on, I realized that I'm responsible for myself, and I want to make sure that everything is taken care of," McIntyre, 59, says. "It's me, myself, and I."
She's in good company. The ranks of singles are swelling. According to the Pew Research Center, about half of the people who are 18 and older are single, a stark contrast from 1960 when just 28% were. And those numbers are expected to grow given today's societal trends.
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. Some are enveloped in a tight-knit community of friends and family, while others are truly on their own. As a result, there's no one estate planning solution for every single person.
Even so, there are a few things to pay attention to.
Why do single people need 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. Basic steps that couples should take include titling accounts properly, having the right life insurance in place, naming guardians for children, and making arrangements for financial and health care decisions.
Singles, on the other hand, may not have a need 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 of extra time thinking about where assets would pass at death, because there may not be a clear set of beneficiaries (like a spouse or children).
Empowering decision makers to act
Who will pay your bills if you are incapacitated? Who will make your investment decisions and sign your tax returns? Those roles normally fall to spouses, even though they too need the right documentation to give them the full power to take these steps.
Those daunting questions prompted McIntyre to take action.
"If you're single and the person holding your power of attorney is a nonrelative, then it's imperative that you have all those things documented," McIntyre says.
McIntyre's mother, when alive, was appointed as McIntyre's power of attorney and McIntyre was appointed as her mother's. After her mother's death in 2004 at the age of 79, McIntyre moved to Plan B, appointing her friend. In return, she is her friend’s power of attorney. In addition, McIntyre chose a backup in case something happened to her friend.
"I handpicked the people I want making decisions for me, and I trust them completely," she says.
Tip: Powers of attorney for financial affairs are an important component of estate planning documents for single people. They appoint someone to act on your behalf in the event that you are incapacitated. Without these, 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 to pay your bills.
Health care decisions
Health care is another crucial area that needs to be addressed. Who will confer with doctors to determine the best treatment for you if you are unable to voice an opinion? Single people who have adult children and intact relationships with their siblings can easily turn to them to be the point person for medical decision making. Those weren’t options for McIntyre.
"I don't have immediate family, but I have friends who were willing to help me," she says.
Not all singles are so lucky.
Judy Lawten, managing director of Sagemont RN Healthcare Advocates in Boulder, Colorado, is routinely asked to act as a medical power of attorney for single people in the area. In fact, 3 requests came in, in just 1 month in early 2018.
"People have called me up and said, 'What if I get hit by a truck at 2 a.m. but I don't have anybody to put everything in action? Can I have your number in my wallet, so the hospital can call you?'"
Lawten has agreed to take on the role, given her background as a registered nurse. Estate planning lawyers can also be empowered to act as medical powers of attorney. However, Lawten urges people to look for someone in their own lives who can take on this job. Professionals may not have the same understanding of your wishes as a relative or even a friend. A nurse like Lawten, for example, may err on the side of relieving pain in a dying person. Your priorities and preferences may be to minimize or prohibit any life-prolonging interventions or administering of pain medications.
"There could be a conflict if the medical power of attorney doesn't know the person well," she says.
Tip: 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. In addition, an advanced directive spells out precisely what types of interventions you agree to if you are not able to communicate your wishes. Having these documents in place allows someone of your choosing to help medical personnel carry out your wishes.
Identify your heirs
For married people, spouses and children are natural heirs, and most probate courts would eventually pass on an inheritance to them. Still, a will is a must for anyone. In particular, what happens if there are no children or spouses?
"If there is no will, then the probate court will rely on state law to determine the order of inheritance," says Fidelity Estate Planning Specialist Nathaniel Arnett.
Eventually, if there are no locatable family members, the money could go to the state as the beneficiary of last resort, though that's rare, Arnett says.
McIntyre clearly understood that state statutes determine who will receive the estate when there is no will, so she worked with an estate planning attorney to draft one as part of her overall approach to financial planning. "If you don't have a will, it's really not all clear what's going to happen to your estate when you die," she says. "I wanted to make sure that my money goes where I want it to go, and the only way to see that done is to have a will."
McIntyre's money will be divided up among friends and charities. In all, about 50 people and institutes stand to inherit.
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 supersede any instructions you leave 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.
Estate planning is never a one and done
Like McIntyre, you may need to update your estate planning documents as life circumstances change.
"I try to update them every 5 years or so," she says.
Since she last updated her will, McIntyre has lost touch with some friends, while others have entered her life and became integral. In addition, her volunteer work has led her to add new charities.
Karen Heald, senior relationship manager for Fidelity Charitable®, tells of a West Coast client who made a big change to her will in consultation with her 2 adult children. Both children are successful in their own careers and are not in need of an inheritance. Instead, the client will leave the bulk of her estate to her favorite charities because she can make a greater impact that way.
"The estate plan reflects her values and supports the charities where she volunteered her time," Heald explains. "The entire family feels satisfied with the revised plan."
Tip: If charitable giving is an important goal for your estate planning, consider using a donor-advised fund to make those gifts. You can receive a tax deduction for any contributions you make now, or your estate plan can direct a portion of your assets to your donor-advised fund upon your death. You can identify the charities you'd like to make grants to—either during your lifetime or after your death. Or you can appoint a successor to manage your charitable giving after your death if you are unsure about which charities you would like to support.