Most people under the age of 40 consider estate planning something to be done “someday”. They hope that they will live a long and healthy life. The reality is there are no guarantees. Your estate plan is similar to a hurricane preparedness plan. You should have one in place so when the storm or disaster strikes, you are ready. The difference with an estate plan is that, eventually, we will all need one.
Lack of estate planning by younger families can result in confusion, resentment and acrimonious feelings between family members. Who will become the guardian of any minor children? Who takes control of the family residence and decides what happens to it? What about any other property the couple has amassed in their time together, such as a vacation home or family business?
With an estate plan, you and your spouse get to make those decisions. Without an estate plan, these decisions could be left up to the court in your state of residence and the laws they have created regarding intestacy (dying without a will or trust in place). If thinking about creating an estate plan scares you, think about a judge whom you’ve never met deciding what happens to your wealth, your children, your pets and anything else that matters to you. That should frighten you enough to at least look into creating an estate plan!
Estate planning is not about the amount of stuff you have, it’s about what happens to it once you are gone. If you have young (minor) children, it is essential to create a plan naming initial, as well as, alternate guardians for them. With a valid will or trust in place naming specific guardians, the court can follow your wishes and does not have to make an independent decision. You can also decide how distributions are to be made for your children. For instance, will your funds be used for college or graduate level education? An initial investment in a business? A first wedding? How much can they pull from the trust and at what age?
Once you have the plan in place, you can revisit it every few years as your circumstances change. For instance, if your children are now grown and married with children of their own, you may want to update your plan to include your grandchildren. If some of your beneficiaries or agents have died or moved away, you may want to update who has responsibility for executing your wishes.
Having a plan in place is the key. Seek the advice of a qualified estate planning attorney to guide you through the preparation of a will and related estate planning documents.
About the Author: Peggy Hoyt Peggy R. Hoyt practices in the areas of family wealth and legacy counselling, including trust and estate planning and administration, elder law, small business creation, succession and exit planning, real estate transactions and animal law.