Estate Planning is for Everyone

The phrase "estate planning" often conjures up images of an older, wealthy person trying to reduce estate taxes at death.  While this certainly is one goal, it only scratches the surface of what estate planning entails.  Estate planning in one form or another is truly for people of all ages, all levels of wealth, and all family configurations.

BENEFITS  I've briefly addressed this topic before in a post entitled, "Do I Really Need a Will?"  Definitely check out that post as well.  However, estate planning is much broader than that question.  While not a complete list, the benefits of estate planning also include:

  • Streamline the administration of your estate at your death, thereby saving your heirs significant time and expense.
  • Name guardians for your children at your death.
    • Who will be responsible for your minor children if you die tomorrow?
  • Avoid conflicts among your heirs, i.e. fights over your belongings.
    • Do you want specific people to inherit specific items from you?
  • Plan for your own incapacity (not death) to avoid costly and time-consuming guardianship or conservatorship proceedings.
    • What would happen if you couldn't take care of yourself, make health care decisions for yourself, access your own bank accounts, or pay your own bills?
  • Make sure your property goes where you want it to go.
    • For example, non-relatives will not inherit from you unless you have some sort of planning in place, such as a simple Will.
  • Make sure your children from a previous relationship receive their inheritance in a blended family situation.
    • Will your new spouse take care of your child from a previous relationship if you die before your new spouse?
  • Protect assets from creditors and from your heirs' creditors.
    • Will your children's inheritance be taken by their creditors or the creditors of their spouse?
  • Minimize taxes and maximize the value of the property left to your heirs.
  • Leave money to charity.
  • Avoid probate altogether, if that is a goal. 

COSTS.  Estate planning can be relatively inexpensive and the benefits simply outweigh the costs.  Depending on your circumstances, you could accomplish every one of the above goals for a few hundred dollars.  At the very least, you should consider having a health care directive or a power of attorney in place - both of which can be put in place with very little cost.

It's important to begin thinking about these issues as a young adult.  If you have minor kids, then some form of estate planning is very strongly recommended.  Getting started is simple and having the framework in place as a young adult makes it easier to revise later on as your circumstances evolve.  Starting early also gets you in the habit of re-evaluating your goals and circumstances to ensure that you have the appropriate planning in place.  Think about the questions in this article and consider contacting an estate planning attorney to see what proper planning can do for you.