One of the main reasons to create an effective estate plan is to make sure that spouses and children are taken care of. However, it is still important to have an estate plan if you do not have a spouse or children. In fact, some would argue that is even more important in this case.
Unfortunately, many people do not realize this as most Americans do not even have a will, which is considered to be the most basic part of an estate plan.
Passing away without a will
When you die intestate (without a will), state law determines what will happen to your assets. For people with a spouse or children, they might not mind if their assets transfer directly to their spouse or children under the law.
But if you have no family members that you are close to, your assets may transfer to someone that you wouldn’t want them to, or someone that you barely know. That is why an estate plan is so important.
With an estate plan, you can choose to leave your assets to a charity, a friend, a significant other or even a political cause that you believe in. Ultimately, you keep control over your assets.
The importance of a medical power of attorney
In addition to assets, you also need to consider who you would want making decisions on your behalf in case you become incapacitated because of injury or illness. Many married people give their spouses or adult children medical power of attorney.
However, people without a spouse or children need to think carefully about who they most trust to make important health-care decisions, if need be. Without a specific person named, friends, medical staff and others could be at-odds over what you would want.
Ultimately, you need an effective estate plan just as much, if not more, than people who are married and have children.