The Importance of Estate Planning & How to Get Started
Creating a will and taking steps towards estate planning is something many associate only with the elderly, but in reality, there is no wrong time to start to take these steps. It may come as a shock to many, but there are certain things that you can and should address as early as your 18th birthday. In this article, we’ll talk more about the important steps to take no matter how old you are.
Estate Planning for Young People
It’s easy to fall in the trap of thinking that your youth means you don’t even have to consider something like planning your estate, but regardless of age it’s important to be prepared and to protect the ones you love should something happen. For young people, this starts the day you turn 18. At this point, your parents no longer have the authority to make decisions pertaining to healthcare or finances on your behalf.
In order to amend this, it’s important to meet with a lawyer in order to specify two things: your healthcare directive and power of attorney. Your healthcare directive “specifies which actions should be taken regarding your health if you are no longer to make decisions”, while power of attorney is given to someone to make decisions for you should you be unable to do so [source].
It may seem morbid, but being proactive about these things should provide you with peace of mind knowing that your bases are covered in the event of a tragedy. Especially if you are in your early to mid twenties and possibly starting a family.
Those in their 30s, 40s, or 50s may even feel that getting started on their estate planning is a bit morbid or excessively early, but this could not be farther from the truth. By this point in your life, you most likely have already acquired a handful of assets [house, car, etc] and many will also have children. Getting a head start on the important facets of planning your estate will enable you to protect those assets and ensure your children are taken care of should something happen to you and/or your partner.
In your 30s, you should have worked with a lawyer on creating either a will or a trust. A will is the most common and is a legal document “that disposes of a person’s property when that person dies” [source]. By working with a legal professional on creating this document you will be protected, and more importantly, ensure your children and spouse are protected in the event of your passing. Without a will things can easily get messy within your family, and even more with the IRS involved.
In some cases, a trust may work better than a will. A trust designates a trustee, someone who will manage your assets for the beneficiaries you specify. There are multiple kinds of trusts, so talk to a legal professional and find out which one best suits your situation.
The age group most often associated with estate planning is such for good reason, but don’t worry: it’s never too late to plan things with your estate. If you were proactive and created these documents potentially decades ago, the most important thing to do is consistently review them to ensure they’re up to date.
It may have been quite some time since you last revised your estate, and much could change in that time period. You could, for example, have come into more assets, had more (grand)children, or be with a new spouse. All of these things would impact the relevancy of the earlier document and mean it would be wise to revisit them.
Now that you can see estate planning is for all ages, check in with your parents, kids, or yourself to ensure all affairs are in order. These conversations can be difficult because of the heavy nature of the subject matter, but it is for that same reason they are so important.
Our team here at Markesbery and Richardson is proud to offer our services for all of your estate planning needs. If you or someone you love is ready to take these important steps towards total estate resolution, reach out to us and we will get back with you shortly to start the process.