Many single Connecticut residents without children neglect to create an estate plan. However, estate planning is important for all adults. Two of the most important items in an estate plan are a power of attorney and a health care proxy. These function while the person is still alive to ensure that agents are appointed to take over financial and medical decision-making in cases of incapacitation.
The next step in estate planning should be creating a will. A will appoints an executor to manage an estate and may also be used to distribute assets. However, another alternative for distributing assets is a revocable trust. The trust can be named as the beneficiary in the will. In turn, the trust itself names beneficiaries. However, a common error is to create a trust and fail to fund it. After all, a trust will not accomplish much if there are no funds.
Some single adults may want to name a significant other as a beneficiary and then arrange for assets to be distributed to nieces and nephews after the significant other’s death. In any case, a successor trustee should be named to take over if the original grantor becomes incapacitated.
The federal estate tax limit is more than $11 million for individuals. Therefore, most people do not have to worry about federal estate taxes. However, Connecticut is one of the few states that impose an estate tax. A person who is creating an estate plan may want to talk to an attorney about lowering the tax burden for heirs. This could ultimately help an estate owner get more mileage out of their wealth.