Estate Planning for Young Professionals: Why Considering Your Death is Important Even at this Age

Part of a monthly multi-part series of discussions aimed at explaining legal and financial considerations for young professionals as they establish and develop their careers, relationships and lives

It’s probably a safe bet that most people in their twenties and thirties have not given much thought to estate planning. Short of a first child or a friend asking if you want life insurance, planning for what will happen when you die probably hasn’t come up and why should it? You’ve got youth and health on your side. Moreover, you probably don’t have a lot of assets at this point.

So why is it important? Planning for the future encompasses much more than where your property goes upon your death. Estate planning can also cover:

• who handles your finances if you are out of town,
• who makes medical decisions for you in the event you become incapacitated, and
• who becomes your guardian if a court declares you incompetent.

With these thoughts in mind, you may want to reflect upon the following considerations:

What Happens to My Assets?

You have more than you think you have. Even if you don’t own a home or a wall safe full of bullion, you still have assets and they need to be distributed somehow and to someone. Consider the following examples: bank accounts, savings accounts, stock, bonds, 401ks, IRAs, other retirement accounts, automobiles, clothes, art, appliances, and furniture. Chances are you have at least one of these things and more than likely you have a few. Maybe you’d like your friend to get your watch or a fund be set aside for your nephew’s college fund. Estate planning assists in sorting out who gets what and when.

What Happens to My Children?

If you have children and are single, chances are you may have spoken with someone about taking care of your children in the event you pass. However, without any sort of document proving these intentions, how will the State know what to do? If you are married with children, your spouse will take on the responsibility, but what if you die at the same time? Or get divorced? Your children’s future should be your decision and not left up to the State or a court system.

What About My Pets?

Not really assets (but considered personal property) and not children (although we may consider them as such), pets are probably just as important to you as both. Estate planning can help you plan for who takes care of your pets, how, and with what money.

What If an Accident Occurs?

It isn’t easy to think about, but deep down we all know that life happens. In the event you become unable to care for yourself or communicate with others, who will make financial and legal decisions for you? What about your children? Until they reach the age of majority, someone will need to make certain decisions for them. With estate planning, you can set out what you would like to happen should an accident happen.

What about My Other Wishes?

Even if you don’t have children or pets, maybe you have a cause. Maybe you’d like to give a gift to your high school or a charity. Maybe you’d like to be buried in a specific place or have one last event thrown in your honor. You can utilize a will or other estate planning mediums to set out your final wishes.

Winding Up Your Estate

Estate planning also provides you an opportunity to collect the important information in your life. Who aside from you knows where you have stashed your assets, what accounts you have, and what your passwords are? Taking a little time to sit down and note these things in an estate document can save your family and friends time and frustration in winding up your estate (it will also give them the authority to do so).

The point of estate planning is to take a few moments now to consider what you would like to have happen in the event you become incapacitated or die. Estate planning helps to facilitate these goals and provides your family and/or friends the ability to carry out these intentions.

On a final note, even if you already have a will or trust, don’t forget that estate planning is not a one and done thing. While certain types of estate documents and language allow for minor changes in your life, life events, such as marriage, the birth of a child, and purchasing a home, all affect what happens after your death. When one of these events occurs, I recommended taking a minute to update your estate documents to make sure your estate intentions are fulfilled.

Next Month’s Topic: Considerations Before Popping the Marital Question: What the Law Has to Say and What You Should Know