Many people believe that estate planning services are needed only by those who are very wealthy…and/or older. Many others know they should have a plan in place and fully intend to get around to it…eventually. The fact is, the time to begin assembling your estate planning documents is on your 18th birthday. And if it’s just one of those things that never seems to make the priority list, you may be placing more at stake than you realize. Here are a few reasons to stop procrastinating and take action on getting your affairs in order.
You need a plan in the event that you become disabled or incapacitated.
Let’s face it…tragedies occur every day to young and old alike. Without the proper legal documents in place, if you are suddenly incapacitated and unable to make decisions regarding your financial and/or medical affairs, the court will step in and select someone to make those decisions for you. The person appointed by the court will have broad authority to act on your behalf and you will have no input as to who is chosen. In addition, the process can take a significant amount of time and be very draining on your family and friends, both financially and emotionally. By establishing financial and health care powers of attorney, you can choose who will make decisions on your behalf and spare your family additional stress at what is likely an already difficult time.
You need to plan for the care of your children.
If you have minor children, it is so important to choose guardians who will take care of them until they become adults in the unfortunate circumstance that both you and your spouse are no longer around. You must also establish how their care and education will be paid for in that time. Without an estate plan, you are leaving these very important decisions to a judge, who does not know your children or your family. One of the most important things you can do for your children is ensure that they are raised by the people that you select if something unfortunate happens.
You need a plan if you are in a second (or later) marriage or have a blended family.
There are a myriad of pitfalls and snares for families who are the result of multiple marriages…from failing to understand the state laws which prevent one spouse from disinheriting the other (called “elective share” or “community property” laws), to improperly titling assets so that your spouse’s children will inherit everything and the other spouse’s children will get nothing. Planning now will prevent resentment and costly lawsuits later.
You need a plan even if you are young and unmarried, with no children.
Not only do many young adults think they will never die, they think they have no assets to pass on. Even if you don’t own a home, it’s important to review the beneficiaries assigned to the IRAs, retirement accounts and life insurance accounts you may have through your employer to make certain that the people you have chosen to receive the benefits will actually get what you intend. Additionally, anyone over the age of 18 should have health care and financial powers of attorney in place, as explained in Reason #1 above.