If you have a spouse or kids, your assets go straight to them after you die. You name your spouse or children as beneficiaries on your accounts and there is no question as to where they are going to go. When you don’t have a spouse or children, things can get a little more difficult because you might not be sure who your assets should go to and choosing an executor for your will could be tricky.
If you don’t have an estate plan, legal costs are going to eat away at your estate and the court will end up naming an heir. Your estate might not go where you want it to go. Even if you don’t have kids or a spouse, it is better to set up an estate plan. You might want to leave your estate to charity, a school, or a trusted friend. None of this will happen if you don’t have a decent estate plan in place.
Draw up an estate plan and think about the causes that interest you. If you have a sizable estate, you could establish a foundation. Do this while you are still alive and you can enjoy it while you are still here. Gifting your money before you die allows you to see the effect that it is going to have on other people.
Other considerations you have to take into account when you are planning your estate are who you are going to name for medical power of attorney. If you get sick and you are unable to make your own health care decisions, you need someone who will be able to do this for you. You also need to name beneficiaries for your 401(k) and life insurance policy.
You might also want to name someone as durable power of attorney in case you are no longer able to handle your finances. You will also need to name someone to be the executor of your estate. The executor is going to distribute your assets and file your will with the court.
This person has to be someone you trust and who can handle the duties of taking care of your estate. If there is no one in your life that you trust to be executor of your will, you can always name your bank. An estate plan is essential, even if you are single.