Estate Planning for Young Professionals
Estate planning can look very different from client to client depending on each individual’s age, family makeup, health, and planning goals. A good estate planning attorney will consider each of these complex factors, and create a plan that addresses all of them, if possible.
Very few young people make estate planning a priority. Often, factors such as student loans, career advancement, marriage, and family planning take precedent over estate planning – and one certainly can’t be blamed for prioritizing these factors before estate planning. But estate planning can address all of these concerns, and work to help young people accomplish their objectives.
Young clients are well-advised to consider estate planning that keeps things relatively simple and flexible due to the always-changing dynamics mentioned above. As families are created, work life stabilizes, and estates grow, clients with a basic framework already in place are best-suited to adapt to changing circumstances. Waiting too long to put that framework in place can make things overwhelming, costly, and difficult to understand when left until a crisis occurs.
Regardless of one’s age, a basic estate plan should include, at a minimum, a Will, Power of Attorney, and Health Care Directives.
Last Will and Testament
Young clients who don’t believe they have a large enough estate to dispose of in a Will should think twice. Even small bank accounts, automobiles, and brokerage accounts are worth passing on to one’s desired beneficiaries. Absent a Will, the law sets default beneficiaries who many not necessarily be the individuals or organizations you’d like to receive your assets.
Young clients may be in relationships which haven’t resulted in marriage. Absent a Will, a surviving (non-spouse) partner is not entitled to anything unless they jointly owned the asset. Other young clients who don’t yet have families, or who aren’t in relationships, often prefer to leave assets to non-profits which align with their values. As any non-profit organization will tell you, every dollar donated counts.
Wills also serve as a means to nominate guardians over one’s minor children if both parents should pass. In the case of a divorce, a parent often nominates a trustee to control assets left to a minor child. These are some of the most important reasons for young clients to draft Wills.
Powers of Attorney
A power of attorney appointing a trusted family member or friend to make legal and financial decisions in the event of incapacity is perhaps the most crucial estate planning tool for a young person. A car accident or catastrophic illness which immobilizes or incapacitates you doesn’t only lead to potentially high medical bills; it can also lead to costly legal fees if another person needs to obtain a guardianship to manage your affairs.
For the same reasons a power of attorney is valuable, a medical directive is also a must-have. Any major health event that requires another person to speak on your behalf, and communicate your wishes to a medical professional, requires that person to have written legal authority to do so. Absent such a written document, a family member or trusted friend must seek to obtain guardianship in order to make decisions for you. Preparing a medical directive while you are in good health and of sound mind allows you to ensure you’ve chosen the person you want having that authority, and avoids unnecessary legal fees involved with the guardianship process.
Call us if you’d like to discuss these important estate planning tools and how they fit into your overall plan at 401-841-5700.