In prior columns, I have discussed estate planning for all kinds of situations – blended families, unmarried couples, the elderly, even pets. But we have not discussed estate planning for singles. For purposes of this discussion, we are going to talk about singles with no children.
Many times when couples get married, they think about doing Wills. If not then, they think about it when they have their first child. This is often driven by the parents desire to name a guardian of their children if both of them are killed in an accident.
But singles don’t get those prompts. And they are usually not concerned about their death.
Let’s look at what happens if a single person has no estate plan. My father had a cousin that died without an estate plan. That means she had no Will. None of her property was jointly held. She had no assets that were payable upon death. She was single and had no children.
She had few assets. So besides being single with no children, she may have thought that her estate was too small to worry about. It was small, but that made no difference in how much work was required.
Under Iowa law, since she had no children and no spouse, her next heir was her parents, who were deceased, and then brothers and sisters. She had no brothers and sisters.
This is where it got difficult. Her heirs under the law were all the descendants of her two sets of grandparents. That would be her cousins, and if a cousin was deceased, then that cousin’s share was divided equally among that cousin’s children. And if any of those children were deceased, divided equally among their children. And so on.
In the end, her estate was divided among 67 individuals. My father received $81.38, with the smallest share being only $18.09.
In a situation like this, all heirs must be found, so there were extra costs for a private detective, as well as extraordinary fees for the attorney.
A single person with no children needs to have a Will or Trust that states who is to receive his/her property upon death. Otherwise, Iowa law controls. Other assets, like 401(k) plans and IRAs, need to have named beneficiaries. Powers of attorney for financial purposes, living wills, and healthcare powers of attorney are essential for singles. Otherwise, who is going to make those decisions if the single person can’t?
Singles without children, just like married couples without children, need to go the extra mile to make sure that when they die, someone knows what assets they have, where they are located, and where there important papers are. The important papers need to include a Will or Trust, as well as powers of attorney.