Why Is Estate Planning Important At All Ages
A large portion of the population believes that estate planning is only for the old. The truth is, many younger people are able to accumulate a significant amount of assets through gifts or investments early in life, and they are at risk for inheritance and probate problems if they suddenly die from accident or illness. Estate planning should start early in life, as soon as you begin to experience significant life events such as getting married, having a family or buying a property.
Many singles may have little to start out with, but even they should pay attention to beneficiaries of their 401K plans, bank accounts and other assets. As the young person begins to consider buying a condo or other property, matters of estate planning can become more important to avoid tax burdens to those who will inherit the assets.
Many committed couples choose not to marry, which bring another set of risks to issues of inheritance. Marriage confers a number of automatic inheritance rights that living-with situations do not. These couples should consider more detailed estate planning to ensure that the partner inherits assets as determined.
Young married couples may begin to accumulate assets from jobs or property held in joint tenancy. Although laws generally favor spouses, young couples’ estate planning should ensure that both names are on titles and deeds to facilitate the transfer of assets should the worst happen.
Couples With Children
Having children adds a new dimension to the importance of estate planning. You should consider a guardian for children if both parents die, as well as the usual listing of beneficiaries on accounts and insurance policies. If you have a significant amount of property, you may wish to set up a “testamentary” trust that goes into effect after the death of the parents to ensure that the children are provided for in the future.
In Case of Divorce
The period between separation and divorce can be a bit of an estate planning limbo. In most states, the spouse is entitled to the bulk of your estate until a divorce is finalized. Some planning, like changing beneficiaries, cannot be done until the divorce is final. This delay can involve IRAs, 401Ks and insurance policies.
Those individuals who have recently lost their spouse should consider their own plans for passing on an estate to children or others. This foresight can help to reduce the tax burden for the heirs.
Other Estate Planning practice areas:
- Special Needs Trusts
- Elder Law
- Health Care Power of Attorneys
- Financial Power of Attorneys
- Living Wills
- Transfer on Death Designations
- How to avoid probate court