Wills for the Young, Single or Broke

Even if you aren't rich and don't have children or a spouse, you still need to spell out your wishes in case you die or can't make medical decisions for yourself. Plus, we help you decide whether to write your will on your own or if you need to hire

Let's play a word association game. I say "estate planning," and you say ...

Did your eyes glaze over at the mere mention of the term? I'll be the first to admit the phrase sounds a bit hoity-toity. Many people think wills are just for people who are rich, old, own property, are married or have children. But even if none of those applies to you -- in fact, even if you're flat broke -- you still need a plan.

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You're never too young to do some basic estate planning. Drawing up a simple plan can be one of the best gifts you can give to your family and friends. Without it, your spouse, parents, partner or other loved ones could spend countless hours and dollars battling courts and each other to carry out what they think you would have wanted in the event of your death or a medical situation.

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There are two main areas of estate planning with which you need to concern yourself. The first is a standard will that gives instructions for how your assets are to be handled and distributed after your death. The second is a plan that details your wishes in the event you are alive but unable to make financial or medical decisions for yourself.

A will for the living

Thinking about your final demise can be quite a downer, so let's start with the second type of plan first. There are several situations in which you might not be able to make decisions for yourself. For example, you might get in a car accident that leaves you unconscious, or your doctors may need a last-minute decision about something while you are sedated for surgery. When you can't speak for yourself, you want to make sure your medical and financial wishes are honored. And that means spelling out your specific preferences on paper and choosing someone you trust to handle decisions for you.

Making these preparations now could save your loved ones a lot of heartache or court hassle. Remember the personal and political firestorm last year that surrounded Terri Schiavo, the brain-damaged Florida woman who was tube-fed for 15 years? Her parents and husband fought for years over whether to remove her feeding tube and let her die. She first landed in the hospital when she was only 26, proving you're never too young to detail your life wishes.

Your living plan should consist of three parts:

1. A durable power of attorney arranges for someone to handle financial matters on your behalf. You may choose to have an active financial power of attorney set up in case something happens to you or you're out of town. This is a popular precaution among couples, says Shae Irving, a legal expert and writer for Nolo. Or, you could stipulate that it only go into effect when a doctor certifies that you have become incapacitated. Without this legal form, your spouse, parents, siblings or live-in partner would have to petition a court for the right to handle things for you. All you need to do to set up a financial durable power of attorney is select a friend or family member you trust to act as your "agent," complete a fill-in-the-blank form and sign it in front of a notary public for a small fee. Many states provide free forms.

2. A health-care proxy, or a durable power of attorney for health care, appoints a person to make medical decisions for you if you can't do so yourself. This includes the power to consent to your doctor to give, withhold or stop any medical treatment, service or procedure, including life-sustaining procedures. Unmarried couples should also state that each partner be allowed to visit the other in the hospital in case there is a "family only" rule. (Get advice on choosing your health care agent from the legal experts at Nolo.com.)

3. A living will spells out the kinds of medical treatment you do and do not want if you are unable to speak for yourself. It generally applies only if a person is terminally ill and faces imminent death -- or if he or she is in a persistent vegetative state. You should share your wishes with your doctor and the person you selected as your health care proxy. Although this can be a contentious issue, it's much more likely that your wishes will be followed if you have a living will.

Health-care proxies and living wills are often called "advance directives." You can find the necessary forms either at your local hospital or from your state. Read more about health care advance directives in Your Will be Done.

A will for end of life

You may be young and healthy, but you never know when the unthinkable might happen, so it makes sense for everyone to have a will. Wills are simple to create, yet most Americans die without one, meaning the court has to step in and distribute their assets according to state law, not necessarily how the deceased may have wanted.

A lot of married couples assume that in the event of one spouse's death, the other will automatically inherit everything. Many young singles may think that mom, dad and their siblings will get everything if they die. Unmarried couples may assume that because they've been in a committed relationship for a long time, the court will give preference to their partner. And parents may think that because they have formally asked a friend or relative to care for their children in the event both parents die that they have sealed the deal. But unless all of these wishes are put into writing, they mean nothing.

Most young adults in their 20s or early 30s can probably get by with a no-frills will. You can use simple computer software such as Quicken's WillMaker Plus ($40) to guide you through the process. However, if you have more than $2 million in assets, a child with disabilities, children from a previous marriage, or complicated wishes for what you want done with your assets, you should consult a lawyer. Not sure? Consult a lawyer anyway just to be sure.

Basically, your will should cover four main areas:

  1. What people or organizations will inherit your property.
  2. Who will serve as guardian to care for your minor children. (Learn more.)
  3. Who will manage the property you leave to your minor children.
  4. Who will serve as executor -- the person who will carry out the wishes in your will.

So, for example, each member of a committed couple (married or unmarried) may choose to leave all their property to each other in case of death. And if they die at the same time, they may choose to leave everything to their children, or to another party. A single person may decide to leave half their assets to a sibling and the other half to a favorite charity, for example.

Don't think you own anything of value? Looking around my cramped apartment, I think the most valuable item I own is my dusty 5-year-old desktop computer -- which I imagine my relatives would fight over who had to dispose of it after my death rather than who got to keep it. But bear in mind that your assets include things like your car, bank accounts, retirement accounts and investments. No matter how seemingly insignificant your possessions, it's important to make the matter of settling your death as easy as possible on your family. A little planning now can lift a huge weight off their shoulders later.

And once you have drawn up a will, you should revisit it if your life situation changes. For example, if you get married, divorced, have a child, your spouse dies, or your assets grow to the point of falling subject to estate taxes ($2 million in 2006), you'll need to take another look at your will.

Erin Burt
Contributing Editor, Kiplinger.com