Looking after No1: estate planning for single people

 20 September 2021
Looking after No1: estate planning for single people

Many estate planning articles and resources make a big assumption about their readership - that they are married or (how modern!) in a long-term relationship.


7.9million and counting

40% of the UK adult population are not living as a couple. That’s about 7.9million people in 2020.

So, this assumption of everyone planning for their future being in a couple can be at best patronising. At worst, the lack of information and advice could make you feel excluded, and that estate planning is not for you.

Nothing could be further from the truth. Effective and timely estate planning for single people is probably more important for singles. There are issues around inheritance tax, long-term care provision, and help if you become incapacitated to be taken into consideration. These will apply whether you have children of your own, have previously been married and divorced, or have been bereaved.


Estate planning issues for those living on their own

Here are some of the common questions we find our non-married clients get asked by friends and family, albeit with the best of intentions.

1. Who will look after you in old age?

This is probably the main question friends and family might ask you, and it’s a rather rude one in our humble opinion! The answer is, you will, through careful estate planning. Yes, children and other family members may play a part, but primarily as a single person, you will be planning your own long-term care provision.

This may involve the help of a financial planning professional to look at your finances, assets and savings such as pensions and annuities, and seeing how they might cover the next 30 or so years of life.

2. What happens if you are incapacitated?

Incapacity isn’t just about major health conditions such as a stroke, heart attack or dementia. As all too many people discovered over the last 16 months, a sudden illness can land you in hospital and incapable of looking after your own affairs for several weeks.

This is why having lasting Powers of Attorney(LPAs) in place is important for those living on their own. When an LPA is activated, your appointed attorney/s can step in and run your affairs for you, from paying the bills to booking a pet minder to feed the cat. Once you recover, you simply “switch off” the LPA and resume control again.

(For more on LPAs and how to appoint an attorney, see our blog.)

3. Who will inherit your estate?

It is important to lay down in your will exactly who will receive what part of your estate, from family heirlooms to substantial assets. If you die intestate (that is, without making a will), and you don’t have children of your own, your estate may get divided amongst a wide spread of relations you have never met or even know about.

If you die without making a will, and “without known kin (entitled blood relatives)”, your estate will pass to the Crown unless it is claimed. Tracking blood relatives down can also be an absolute nightmare, as the TV show “Heir Hunters” showed when trying to find beneficiaries from estates on the ‘Bona Vacantia’ unclaimed estates list.

Making a will ensures the people you want to benefit do so, including any chosen charities (see below for more on this). Your Will should include as much detail for contacting these people as possible. Otherwise, your executor might have to do some in-depth genealogy to work out that “cousin Fred” is actually your second cousin twice removed who moved to Australia, or whatever.

It also (usually) prevents squabbling or relative contesting the provisions of the Will. It is no guarantee, however. Research by Direct Line revealed that almost 25% of UK adults, that’s over 12.6million people, would contest a will if they disagreed with it. Including a will clarity statement in your will can help further clarify your wishes for your beneficiaries, and a judge in any court action they might want to take.

4. Do you have life insurance?

Life insurance is something you won’t benefit from directly, of course, as it only pays out on your death. However, if you want to ensure someone you care about or look after is provided for, you can make them the beneficiary of your life insurance policy. This is a specialist area and you should always seek professional advice before taking out a policy. Paul can help you with this if required, as a regulated financial advisor.

5. What happens with Inheritance Tax (IHT)?

Unfortunately, Inheritance Tax law is not on the side of single people. A spouse can, for example, inherit with no IHT due. Likewise, there are ways to transfer /share tax allowances between spouses. As a single person, there are far fewer ways to reduce your IHT bill for those who will inherit your estate. Again, seek professional estate planning advice to ensure you make the most of what opportunities there are available.

6. Are you leaving a legacy?

If you have no family or decide that your family members really don’t need financial help from your estate, you can leave a legacy (gift) in your will for a charity or charities instead. This way, you know that long after you have gone, your estate will be helping fund important causes close to your heart.

Just to say that many charities these days offer to write your will for you for free. You don’t have to leave the charity in question a gift in your will, but let’s say it will be heavily hinted that you might like to do so! Be aware that this service will create a basic Will, and the service won’t usually include any guidance on key issues such inheritance tax or Trusts.

To ensure your Will is watertight as far as possible, we strongly suggest you use a professional will writing service, such as ours. (For more information on writing a will including a gift to charity, just give us a call.)


Estate planning for everyone

At Panthera, we help a wide range of clients with their estate planning. You don’t need to be a high earner, have lots of assets or even know your LPA from your elbow. We are genuinely happy to help you plan for the future with confidence and proper insight and information. Contact us and we’ll have a chat:

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At each stage of the process, Paul Hammond - the Directory of Panthera, explained in simple understandable language what was going to happen and if there would be any complications. None happened, I am sure, because of his eye for detail.

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