If you’re young, estate planning is probably not high on your priority list. Old age, wrinkles, major health problems, and death most likely feel like a far distant future. But the truth is life is uncertain, and nobody knows when their time will be up. While that’s a harsh reality to face, this shouldn’t stop you from making important decisions about your finances, children, and real estate should the unthinkable happen. There’s a lot at stake here.
Tackling an estate plan at any age can be difficult. But upfront planning of your assets and issues like guardianship can save your family a great deal of heartache during an already difficult time. Here are six compelling reasons why estate planning matters, even for younger people.
1. Control where your assets will end up.
Perhaps the most fundamental reason to have a will is to choose who gets what. While it may sound simple enough, clearly spelling out these decisions ahead of time can save your family a lot of grief and squabbles. And if you have children, an estate plan is the best way to ensure your legacy looks the way you want it.
2. Name guardians for minor children.
While it’s unlikely both you and your spouse will die prematurely, choosing a guardian for your children in the event of the unimaginable should be a top priority. Without a will, the court appoints who your children will live without your direction, and that person may or may not be your first choice. Also, naming a guardian can help negate ugly, drawn-out family disagreements over who should take care of your children.
3. Specify beneficiaries.
For most young couples, life insurance and retirement plans make up the bulk of their estate. If both you and your spouse die, you need to designate who would receive that money. For most, those assets go to surviving children in the form of a trust (more on that next). But keep in mind that if just one of you passes away, assets go to the beneficiary named on each specific account, regardless of what your will says. And it’s easy to forget who was initially named when an account was opened, and end up with old designations.
4. Set up necessary trusts for children.
If you leave money or property to underage kids, you’ll need a trust to manage the assets. Without a trust, the court will appoint someone to oversee their accounts. And just like with guardianship, the court’s choice may not be your ideal pick. With a will, any money from your estate, including retirement or insurance accounts, goes into a trust and is managed by a trustee—a trustworthy family, friend, or third party you choose ahead of time to handle the money. It’s critical to select a trustee who knows how to handle money well and will act appropriately on your behalf.
5. Appoint financial and health powers of attorney.
A power of attorney gives authority to another person (called an attorney-in-fact) to access your accounts and property if you become unable or incapacitated. For a single person, an attorney-in-fact can dip into your bank account to pay necessary bills and can also help make medical decisions for you. But married couples should have powers of attorney, too. If you and your spouse own separate properties, bank accounts, or retirement funds, the assets can’t be accessed unless a power of attorney has been granted. Also, spouses cannot sell jointly held property without consent or the sometimes grueling process of going before a judge.
6. Save money on fees.
Smart estate planning lessens the costs and strain on your loved ones. Without a will, your estate is decided by the court, which can burden your family with unnecessary stress and attorney fees. Your family will surely appreciate the extra savings due to your thoughtful planning.
If you’re looking for help with these sensitive but super essential matters, we offer a straightforward estate plan package with:
- Last Will & Testament
- Financial Power of Attorney
- Healthcare Power of Attorney
- Living Will
- Funeral Planning Directive
While it’s not always easy or fun, making an estate plan now will give you peace of mind and protection for those you love most. Whatever your life stage and situation, we can help you put together a plan that’s right for you. Reach out to Cecelia Neihouser Harper at 765-637-9175.
The content of this blog is intended to be general and informational in nature. It is advertising material and is not intended to be, nor is it, legal advice to or for any particular person, case, or circumstance. Each situation is different, and you should consult an attorney if you have any questions about your situation.