Much of estate planning revolves around the family, children and immediate loved ones. Passing assets in a large, closely-knit family seems natural, but if you live alone or aren't in close contact with family members, the future of your estate might not look as clear. What are your options?
As a single person, it is up to you entirely to choose the people and organizations you want to support, which can be an empowering task for those who want to take advantage of their estate planning tools.
Without an estate plan, your assets could be passed to people or organizations with whom you don't have a close relationship. However, through estate planning, you can take a significant step in seeing that your life's work has meaning to you beyond your time.
Americans are increasingly living alone
According to a new study by the National Center for Family & Marriage Research, 13 percent of U.S. adults live alone. Americans age 45 to 65 are the most likely to live alone and have seen the most significant increase in single households since 1990. However, just because more people live alone does not mean they are lonely. Researchers point out that many people still claim a robust social network among their peers.
These numbers are expected to rise in the future as life expectancy improves. Additionally, more than half of U.S. adults are not married, and divorcees are growing less likely to remarry. Given these statistics, let's consider the estate planning tools that are available to you and how they can be effectively applied to your situation.
Opening the toolbox of estate planning
When considering how you will pass on your estate, you must think about what you want to include and who you want to oversee the process. For single adults, this process requires careful selection of trusted relatives, friends and legal professionals.
What: The "what" of your estate plan includes lifelong assets like your 401(k), long-term savings accounts and life insurance benefits. You should also consider items such as your home, car, clothing and sentimental gifts. You can even include your favorite charity organizations to receive your assets and possessions beyond what you want to give to friends and relatives.
Who: After you decide what you want to pass on, the decision of "who" you want to oversee the process is just as important. This person, known as an executor, can be a trusted friend, advisor or a legal professional.
No matter what you decide to do with your assets in an estate plan, know that you are empowered with the legal tools to make choices for yourself in accordance with your wishes.