Some people may wrongfully assume the estate planning process is for families with children or couples with valuable assets to divvy up or protect for the other party’s future. Everyone, particularly single Michigan residents, needs to ensure that a proper and well-thought-out estate plan is in place as soon as possible. Single people may be at a greater risk of seeing assets distributed in a manner in which they would not approve.
According to law, when one spouse dies, most property and assets typically get passed on to the other spouse. This occurs even when there is no will or formal estate plan. When a single person without children dies without any plan in place, assets may be given to the next closest relative. This may be parents or siblings. Without a will, the single person simply has no say in how this process unfolds.
A single person without children may want to ensure that assets go to a specific charity or as a gift to individual beneficiaries. The overall value of the estate can be reduced in this process due to tax obligations. There are specific gift taxes and liabilities that can come into play. Utilizing a trust as a means of distributing assets may be the best way to alleviate or prevent tax liabilities from cutting into the overall value of an estate.
Protection of funds and assets through a comprehensive and up-to-date estate plan is something everyone should think about. Singles in particular need to understand their unique situation and what the future may hold for all they worked for if no plan is in place. A will may be a great start for singles in Michigan, but a more structured and tailored approach may help singles explicitly ensure that wishes are upheld and tax liabilities are minimized.
Source: cheatsheet.com, “Estate Planning 101: How Singles Can Protect Their Loved Ones“, Sheiresa Ngo, May 9, 2015
