You are young and healthy, which means you are too young to have an estate plan, right? Why think about what happens to your assets after you have gotten to this stage of life? While this is a common perception, it couldn’t be further from the truth. There are a number of compelling reasons why it’s important to address estate planning, regardless of how old the individual is or the amount of wealth they have amassed.
A key aspect of estate planning involves directing your medical care should you become incapacitated. Creating a health care directive and designating a power of attorney ensures that your wishes are carried out, despite your inability to express them.
Another key factor when formulating an estate plan is naming beneficiaries and stating how you want your assets to be distributed. If you die without a plan in place, your estate will go through probate and the state will take charge of distributing your assets in accordance with the intestacy laws. Having an estate undergo probate is of particular concern for a person with high net worth as the cost and time will be significant and the tax burden will be quite high.
Nobody is too young for an estate plan
The state of California has a specific set of laws. These laws are called intestacy laws, which decide how your assets are distributed if you die without an estate plan. For example, if you have siblings but no spouse, children, or parents, your siblings will inherit everything. Or in the case in which you have a spouse and two children, your spouse inherits all of your community property and ⅓ of your separate property, and your children inherit ⅔ of your separate property.
Even if you are young, creating an estate plan is the only way to ensure your assets are split the way you wish them to be and not as mandated by the state. Also, critical among the list of reasons you need an estate plan is the need to name a guardian that will care for and raise your children.
Unfortunately, accidents can happen to folks of any age and may result in children being left without a parent. Your estate planning lawyer will provide you a list of questions to consider when choosing a legal guardian. Designation of a guardian and provisions for your children’s financial needs will mean the difference between stability and chaos for bereaved children.
Planning together
Considering all of the information above, the truth is that there is no designated average age to start an estate plan, and you do not need to be wealthy to start planning for the future. A recent survey conducted by Caring.com found that only one in three Americans have drawn up a will or a living trust, and many respondents had not done so because they believe they do not have enough assets.
Neither age nor net worth should drive your decision to draw up an estate plan. There are many estate planning attorneys who can help you navigate the process and take the unknowns out of it.
Those who possess large amount of assets should select an attorney who is experienced in high-net-worth estate planning, as it is a niche area of the law. They are knowledgeable in specific investment vehicles, such as the HYCET Trust, that can safeguard your assets from creditors and nefarious lawsuits.