“Oh, I’m too young to need a will right now.” “I don’t have enough money to need estate planning!”
These comments are tied for the most frequent refrains of people within my age range when I tell them I work in estate planning. Oftentimes, they are said within the same breath. While it is true that most people in their 20s and early 30s are in their prime earning years and do have less assets than they are likely to later in life, that does not mean that they do not need (or should not consider) estate planning help during that period.
Protecting Wishes/Protecting Growth
While trends show that people are getting married later, having children later, and purchasing homes later, the 20s and early 30s are still a prime time for determining how an individual will protect their assets after death. As more assets are accumulated, particularly real property, the need for protecting those investments increases.
Though a young person may not have the most assets, establishing a will early provides protection for the future. For instance, if an individual knows that they would like to provide for an ailing sibling, outlining that wish in a will through a percentage gift is a more effective way of ensuring that provision than intestacy allows. Under common law, an unmarried person’s assets flow to their parents. In this scenario, the parents may or may not choose to honor the wish to provide for the sibling. But stating so in a will ensures it will happen.
Once marriage has occurred, intestacy laws will protect some assets, as the surviving spouse is first in line to take from a deceased spouse. However, crafting a document that denotes specifically that a deceased spouse’s assets go to the surviving spouse ensures this process and can help reduce the toll of the probate process. Once a couple–no matter how young–has children, the need for estate planning documents increases dramatically. Said couple will need to reallocate its prior will to include provisions for the child’s wellbeing after the parents death.
Even if a young person does not think they need a will to protect their assets, everyone needs incapacity documents to ensure proper care and decision-making. Generally healthy young people often do not consider the possibility of having a stroke, heart attack, or being bedridden after a freak helicopter accident. By working with an estate planner to craft incapacity documents the young person can limit the potential stress and myriad decisions that come with a catastrophic injury.
Knowing in advance who will make legal and financial decisions and who will make health care decisions for an incapacitated person can provide the opportunity for the young person to discuss what they want. The Durable General Power of Attorney and Health Care Power of Attorney will then have the legal power make decisions that is in the best interest of the incapacitated individual. Additionally, knowing what type of end-of-life care a person wants through the use of an Advance Directive can alleviate some of the confusion on the part of the Power of Attorney.
While young people should consider planning their estate, change is inevitable. Thankfully, all of the documents mentioned above can be amended to match current needs. Just because something may happen in the near future does not mean it should stop a person from planning today.