The single person's guide to smart estate planning

If you are single (whether widowed, divorced or never married) with no children or grown children, and approaching retirement, you may not have given much thought to planning your estate. You have likely been building your career, putting away money and spending your time off enjoying your favorite hobbies and exploring new vacation frontiers. 

However, putting your affairs in order is especially important if you are unmarried. Without a plan in place, as a single person, many of your assets could go through probate court and be divided according to your state’s laws, which may not be as you would have intended. 

But with a little planning around the key documents and decisions required, you can make sure you have everything covered to give yourself peace of mind while you’re still the decision maker. This ensures your wishes are carried out when the time comes, making a difficult time more bearable for those closest to you.  

Beyond finances, you should have goals for your estate plan. Are there specific charities you’d like to support? Or perhaps you want your children, nieces, nephews or grandchildren to have the best education available? Answering such questions can help you frame your estate plan and lead to valuable discussions among family members and friends of different generations.

Choose your power of attorney wisely

The first task is to create a power of attorney, naming a trusted individual to make legal and financial decisions for you should you become incapacitated and unable to do so yourself. Similarly, you should nominate a healthcare proxy who will make any necessary medical decisions on your behalf. Make sure you choose someone who is aware of your healthcare choices and will respect them. You could ask the same person to fulfill both roles, but many people choose to select a different individual to handle each of the respective roles. The key is to handpick close confidantes who you trust completely and start conversations early, as both are big roles to fill requiring a lot of responsibility.

Don’t put off drafting a will 

Making a will ensures your estate will be distributed according to your wishes. A single person may wish to designate a beneficiary, such as their child, another family member, a friend or a charity. Without one, your state's laws determine where your property goes — and that may not align with what you want. Choosing the right person to administer the will — the executor — is another important decision. They control your assets during the probate process and pay final expenses, debts and distribute the residue, as well as file any estate tax returns. Once created, make sure you have it finalized and signed according to your state’s requirements such as witnessing and notarizing so it will stand up in court.

Name your beneficiaries and keep them current 

Bank accounts, pensions, IRAs, brokerage accounts and life insurance can all be passed through beneficiary designations rather than your will. Naming a beneficiary makes the account automatically "payable on death" to them and allows the funds to skip the probate process. But remember it’s important to keep your beneficiaries current to prevent an unwanted inheritor, such as an ex-partner. 

Alternatively, some assets can be placed in a revocable trust that you control while you are alive and can go directly to named beneficiaries once you pass. You’ll want to name a trustee who you can rely on to step in when you cannot manage them yourself. It’s also important to make sure your estate plan is aligned with the laws of the state where you live, as inheritance and estate taxes vary across different states. 

Leave a legacy

Many people want to leave their mark in life by giving to foundations or charities, directly or through a charitable trust. If you have a sound financial plan and feel confident about having enough money to live comfortably in retirement, it might be wise to consider reducing your estate and gift to a charity while you are alive and can see the benefit given to others. You can also leave a legacy to your family — the easiest way is through annual gifts. Although the amount will vary from year to year, you can currently give up to $15,000 annually. On top of this, you can pay unlimited amounts for educational or medical expenses (within certain IRS rules). 

Invest in long-term care

As a single person, it’s really important to consider a plan for your long-term care. With more than 70% of Americans requiring long-term care for an average of 3.7 years for women and 2.6 years for men, accelerating home care costs are creating an affordability gap, particularly for middle-income Americans.1 To ensure you are able to cover the cost of aging in the comfort of your own home, consider taking out long-term care insurance, either directly or through a revocable trust. Another option is to add a rider such as long-term care on your life insurance policy, which offers additional flexibility but for an additional charge.  

Plan now, relax later

Whether widowed, divorced or never married, single people have different estate planning needs than married couples. And the same applies to unmarried couples who are living together — in the eyes of the law they are considered single as well, and need to have a well-coordinated plan.

Estate planning can be an emotional and complex subject to address for many people, but is an important part of being “retirement ready.” If you don’t have an estate plan that speaks to asset transfer (business and financial decisions, healthcare directives and legacy goals), talk with a financial professional who can help you craft a comprehensive strategy tailored to your situation to ensure your assets will be distributed the way you intend.
1 Genworth 2019 Cost of Care Survey.

Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (NY, NY), Equitable Financial Life Insurance Company of America, an AZ stock company with main administrative headquarters in Jersey City, NJ, and Equitable Distributors, LLC.  Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI and TN).  Equitable Advisors and its affiliates and associates do not provide tax or legal advice or services.
GE- 3183122 (07/2020) (Exp. 07/2022)