Studies show that a majority of Americans don\u2019t have a will or an estate plan. Whether it\u2019s a matter of procrastination or the perception that an estate plan is unnecessary, the result is the same: too many people die without a will (known as dying intestate<\/a>), leaving the distribution of their estate up to probate court and the state\u2019s intestacy laws.<\/p>\n Intestate succession tends to favor spouses<\/a> and direct descendants<\/a>, so the risk is even greater for people who die without any heirs. It\u2019s imperative that people in this circumstance carefully consider who they\u2019d like to gift assets to, and draft a full estate plan to plan for all contingencies.<\/p>\n If you\u2019re considering making an estate plan and you don\u2019t have a spouse or children, you\u2019ll want to meet with an estate planning attorney to address the following questions:<\/p>\n If you become incapacitated\u2014perhaps due to a coma, mental illness, or senility\u2014you\u2019ll need someone to handle your affairs and make important decisions for you. Absent a spouse and children, most people in this situation turn to a sibling, cousin, or even a close friend for help.<\/p>\n You\u2019re free to choose whomever you\u2019d like, as long as you can trust this person to prudently handle your finances, pay your bills, and ensure you are properly cared for as long as you\u2019re alive. This person (known as an attorney-in-fact) will need special authority to do this. Draft a durable power of attorney<\/a> to give them access to your financial accounts and medical records, and be sure to include any necessary restrictions in the document (e.g. you can give the attorney-in-fact unlimited access to your assets and records, or you can restrict access to bank and brokerage accounts).<\/p>\n In addition to a power of attorney, you\u2019ll want to draft an advance healthcare directive<\/a>, too. This legal document (also known as a living will) is used to inform your doctors of your healthcare and treatment preferences in case you are incapacitated and unable to communicate. This may seem redundant if you have a healthcare proxy via a power of attorney, but it\u2019s nonetheless necessary.<\/p>\n Without a living will, your healthcare proxy will have to guess what your intentions are, and that can be an extremely difficult decision when it involves subjects such as artificial life support or serious surgery. To make it easy for your loved ones, take a few moments to put your preferences on paper. You can broadly authorize any and all treatments to save and sustain your life, or you can specify which treatments you approve and which you don\u2019t. Common topics in a living will include palliative care, artificial life support, and resuscitation.<\/p>\n This is another decision that shouldn\u2019t be left to your loved ones\u2019 best guesses. If you are in a financial position to purchase pre-needs services from a cemetery or crematorium, it\u2019s always best to take care of those things in advance. If not, you should at least leave clear instructions on how your surviving loved ones should handle your funeral and burial, and guidance on which assets should be used to pay for the services.<\/p>\n Either way, put your plan and intentions in a formal letter of intent, and leave the letter with a trusted friend or family member. A letter of intent is not legally binding like a will, trust, or power of attorney, but it\u2019s certainly helpful for your loved ones.<\/p>\n When you pass away, you\u2019ll need to appoint someone to settle your affairs and distribute your estate. Much like someone who is given authorization through a power of attorney, this individual (known as an executor or personal representative<\/a>) will have full authority to gather your assets, settle your liabilities, pay your final taxes, and ultimately distribute your remaining assets.<\/p>\n You\u2019re free to nominate anybody, family or friends, and you can even nominate a backup executor to handle the job in case the primary executor dies before you. Whomever you choose, you\u2019ll formally nominate them in your last will and testament.<\/p>\n This is often the hardest decision for people without heirs, but it doesn\u2019t have to be. You\u2019ve worked hard to earn and accumulate assets during your lifetime\u2014it should be exciting to decide what to do with those assets when you die, and what kind of legacy you\u2019ll leave behind. If you\u2019re have siblings, nieces and nephews, cousins, or close friends, any of these people are great choices as beneficiaries.<\/p>\n Don\u2019t feel like you have to give it all to a few people\u2014you can give each niece and nephew $1,000 towards higher education, and you can leave $500 to a few close friends to go on a group vacation in your memory. Do what you think is best, and make it fun (at least, fun by estate planning standards).<\/p>\n Another great option giving money to charities. Pick a favorite charity, or choose a handful that address issues that you\u2019re passionate about, and leave instructions to gift assets to organizations that will use your hard-earned assets for good. If you\u2019d like to give any assets to charity, talk to an estate planning attorney<\/a> or a financial advisor about the different charitable trust options you can use to minimize taxes and exert control over the use of your gifted assets.<\/p>\n Without getting too complicated, there are certain assets that are subject to probate (the county court that distributes property according to your will), and there are assets that can automatically transfer to beneficiaries when you die. Assets that are subject to probate should be addressed in your will, or transferred to a trust. These assets include:<\/p>\n\n
What Will Happen if you Become Mentally or Physically Incapacitated?<\/h2>\n
What are your Wishes for a Funeral and Burial?<\/h2>\n
Who Would you Like to Manage Your Estate?<\/h2>\n
Who Would You Like to Gift Assets To?<\/h2>\n
How Should You Address Assets Subject to Probate?<\/h2>\n