Being single, Jennifer McIntyre is used to planning her financial moves on her own.
After a 20-year career, she left her job in her late 40s for what was supposed to be a brief hiatus to travel and explore other interests. But after reviewing her situation with her Fidelity financial representative, she realized she didn't need a regular paycheck and began consulting on a pro bono basis.
Jennifer applied the same can-do attitude to her estate planning. As the only child of parents who were also only children, she realized she would have to take extra measures to come up with an estate plan that gave her independence and reassurance.
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. There's no one estate planning solution for every single person.
Even so, here are some lessons Jennifer learned that could help most singles.
Take time to make 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. Singles, on the other hand, may not need a will 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 more time thinking about where their assets would pass at death, because there may not be a clear set of beneficiaries (like a spouse or children).
Put in place a power of attorney and health care proxy
Powers of attorney for financial affairs appoint someone to act on your behalf if you become incapacitated, and are an important component of estate planning for single people. Without these documents, 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 needed to pay bills.
Originally, Jennifer’s mother was appointed as her power of attorney. But after her mother's death in 2004, she appointed a close friend. Additionally, Jennifer 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.
Health care decisions
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. This spells out precisely what types of interventions you agree to if you are not able to communicate your wishes. These documents must be in place to allow someone of your choosing to help medical personnel carry out your wishes.
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. However, those weren’t options for Jennifer. "I don't have immediate family, but I have friends who were willing to help me," she says. Other options include estate planning attorneys and RN health care advocates.
Identify your heirs
For married people, spouses and children are natural heirs. A will is a must for anyone, because if there is no will, the probate court will rely on state law to determine the order of inheritance.
Jennifer 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 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." Jennifer decided her money will be left to friends and charitable institutions.
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 override any instructions 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
Update your estate planning as needed
Like Jennifer McIntyre, you may need to update your estate planning documents as life circumstances change. Since she last updated her will, Jennifer 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.
Having an updated estate plan can help ensure that everything you worked so hard for is distributed to the people, charities, and organizations that mean the most to you.
If you are looking for help setting up a trust, updating your beneficiaries, writing a will, or gathering your key financial and health care documents, a Fidelity advisor can help.
To prepare, consider pulling together key information with the help of the online Fidelity Estate Planner®.
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