Getting married and starting a family can change your financial picture in substantial ways. One of the most essential tools you may need to protect your loved ones in that scenario is a last will and testament.
But what if you're still single, and those kinds of life changes aren't yet on the horizon? You may assume that you don't need the legal protections a will can offer but there are several important reasons to consider drafting one.
Last Will and Testament
The primary function of a will is to outline your wishes with regard to who will inherit your assets when you pass away. That can include things like a home you own, investment and bank accounts or your car. You can also use a will to pass on any assets that have more sentimental than financial value, such as collectibles, clothing or other personal effects. You wouldn't, however, include any financial assets that already have a designated beneficiary in your will, such as:
- Life insurance policies
- Individual retirement accounts
- Employer-sponsored retirement plans
- Bank accounts
- Other investment accounts
Having a will ensures that your wishes are honored with regard to how you want your assets divided. If you die without a will, you're deemed intestate. When that happens, all of your assets are divided up according to the inheritance laws outlined in your state. If you're married, your spouse and children would typically get first rights to your estate but when you're single, your primary heirs would normally include your parents, siblings and other family members.
Writing a will can help ensure your assets are distributed according to your wishes but it doesn't allow your estate to avoid the probate process. If you'd like for some of your assets to avoid probate, you'd need to consider an alternative, such as placing them in a trust instead.
When a Will Makes Sense if You're Single
If you're young and healthy, the thought of something happening to you may have never crossed your mind. And if you're older and still single, you may not feel the need to get a will until you're married or have kids in the picture.
So, who is a will right for? You may need a will when you're single if:
- You have a positive net worth
- You own a home or have other assets that would need to be distributed if you die
- You're worried about who would end up with your assets once you pass away
- You want to use your will to make financial gifts to individuals or charitable donations
- You want to leave specific instructions about how your pets should be cared for
- You have cosigned or joint debts that you don't want to leave someone else with
- You have minor children you'd like to name a legal guardian for
Does that mean you don't need a will at all if you're single but have few assets or a significant amount of debt? Not necessarily. If you'd like to make sure your best friend gets your book collection or your sister inherits your prized guitar, then a will can ensure that it happens.
There are certain things a will can't do, including leaving joint property to someone other than your co-owner and distributing property held in a trust. You also can't use a will to specify your wishes regarding end of life care; for that, you'd need an advance health directive.
Writing a Will When You're Single
There are two ways to make a will when you're single: you can either do it yourself online or ask an estate planning attorney for help.
The DIY route may be more appealing if you have a relatively simple estate and you want to avoid high legal fees. On the other hand, if you've accumulated a decent amount of assets because you own several rental properties or the market's been good to your portfolio, then it may be better to have an experienced professional on-board.
You could hand-write your will but without witnesses those aren't recognized as legal in every state. The better, and safer, the option is to have a computer-generated document outlining your wishes that you can have notarized and filed with the probate court in your state if that's required to make it official. You can easily create this using online will making programs.
As you write your will, remember:
- You'll need to name an executor. After your death, this person is responsible for inventorying your assets, notifying your creditors and paying any outstanding debts and distributing your assets to your heirs.
- You may need witnesses. Probate law varies from state to state and many states require your will to be witnessed by at least two people. Generally, your witnesses must be legal adults and of sound mind. Some states prohibit anyone who has a financial interest in the will from being a witness. The same goes for your executor.
- You'll need a plan for how you want your assets to be distributed. This part of the will-writing process is what requires the most thought. While you can change a will after it's finalized, that can be problematic if one of your heirs contests the original will after you've passed away. Before you commit your wishes to paper, take time to think carefully about what assets you want to include and who you want them to go to.
Keep in mind that your will may need to change as your life situation changes. If your single status changes because you've gotten married, you become a parent or you acquire new assets, remember that your will should reflect those changes. It's a good idea to review your will at least once per year to ensure that it still's a good fit for your financial situation.