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Naming beneficiaries in estate plans is important for singles

One huge misconception about creating an estate plan in Texas is that only people who are married really need one. The truth is that an estate plan, in which beneficiaries are named, is equally as important for single people. This is because an estate plan is designed to protect one's assets in the event of one's death, as well as to protect one's wishes in the event of incapacitation.

When two people are married, if one spouse ends up being incapacitated and lacks the appropriate power of attorney documents, there is a natural assumption that the other spouse will be appointed as guardian by the court. However, this situation is more complex when a single person suffers incapacitation. Based on the law, the single person's parents are usually considered next-of-kin, but the parents might not be in the best position to assume this extra responsibility.

The incapacitated single person might have preferred a person closer to his or her age to be his or her guardian -- for example, a sibling. Unfortunately, the family members and the court would have no way of knowing that. This is why it is so critical for single people to execute both health and financial powers of attorney.

When a single individual dies with no estate plan, assets that name specific beneficiaries, such as life insurance or an IRA, will end up being distributed to the named individuals. However, real estate, brokerage accounts, bank accounts and other assets lacking beneficiary designations must go through the costly and time-consuming process of probate, during which the state dictates who will benefit from them. Appropriate legal guidance can help single people to truly control who the beneficiaries of their assets are when they die, as well as what will happen to them if they become incapacitated in Texas.

Source: fdlreporter.com, "Easing the burden: Estate planning for singles", Isabell Mueller, June 24, 2016

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