Am I Too Young to Start Estate Planning?

There is a lot of mystery involving Estate Planning. It sounds fancy and exclusive. But Estate Planning is a service that is available to everyone, and unlike popular belief it is not just for the rich and/or the elderly. This causes a lot of people to ask themselves, ¨when should I start an Estate Plan?¨ You don’t need to have a 40-acre estate, and it’s not really about your net worth, it’s more about planning for the people you love. 

We suggest that young people start to think about creating a Will. The main things young people have to worry about is making sure they select a beneficiary to be appointed to each one of their accounts. They might have certain benefits from their jobs including a 401k account, Roth IRA account, and life insurance, all these accounts need to be assigned with a beneficiary. Even assets like their car and personal possessions should be taken care of. Young people might not have children yet, but they most certainly have people they care about, and planning for the worst-case scenario will give peace of mind to young adults and their families. 

A Will based plan has certain benefits for young adults. First of all, a Will-based plan will be generally lighter on your wallet. A Will is also used more often for people with less assets and first timers when it comes to estate planning. There’s also no need to worry about your will becoming irrelevant as you can always go back and revise it. 

If you’re not a young 20 something year old, but you’re not even close to retiring yet, everything we said above applies here, more so even. Especially when you take into account your potential spouse, children, your likely higher wage, home, and various assets. 

Most People

Let’s be honest, most people don’t think twice about making an Estate Plan until it’s too late. In fact, only 4 in 10 Americans adults have a living will or trust according to AARP. A lot of Americans think about Estate Planning as one of those things they will eventually get around to. A big issue when it comes to Estate Planning is the misconception that it is complicated and it is only for wealthy and elderly people. If you erase these notions from your own prejudice you will automatically be better off and better prepared than most people. 

Will or Trust, How do I Know Which I Need?

Essentially a Will is a document that states what will happen to your assets and how you want your affairs handled after you die. A Trust is a document that gives permission to another party to handle your assets and estate for the benefit of your beneficiaries (link to beneficiary blog post) after you die. Trusts have certain benefits that Wills don’t, for example, with a revocable living Trust you can avoid the probate court process. For more information on the differences of Wills and Trust go to ctwillsandtrusts.com

Factors to Consider

When deciding to make a Will or a Trust, then there are some factors to consider that will guide you in your decision.

Your Health

If you are a healthy person with no serious medical issue, then you would probably be good with a Will based plan. You don’t really have to worry about appointing a Health Care Power of Attorney right now (though it might be wise to prepare for the possibility of unanticipated medical issues), and if things change then you can always update your Estate Plan. 

Children

Consider if you have children or grandchildren. The more descendants you have, the more complicated your Estate Plan will most likely be. If this is the case, then a Trust- based plan is likely to work better for you. 

Value of Your Assets and Estate

Generally, it’s typical for people with assets with a total value of $500,000 or less to go with Will instead of a Trust. People with a net worth exceeding this amount typically go with a Trust because there’s a lot more assets and stuff to allocate.  

Beneficiaries

Whether you decide on a Will or a Trust-based plan, make sure to think about who you want your beneficiaries to be, this might be the most important decision you need to make when talking about Estate Planning. 

Benefits of an Estate Plan

If you are wondering when to start Estate Planning, you most likely already know the benefits. Just in case though, these are the fantastic benefits of Estate Planning. 

Minimize the Probate Process

Estate Planning will make the probate process much simpler. Going to probate court, feeling confident that your loved one had an estate plan, will provide some relief of this stress you will be experiencing while you grieve for your loved ones. It will also save your family from expensive legal fees and court costs incurred in the probate process. 

Decide Who Gets Your Assets After You Pass Away

Of course, this is the main part of an Estate Plan. It might be obvious, but let’s make sure that boat, house, jewelry and sports cards get into the right hands. People often think that without a Will their spouse automatically gets everything, but this is far from true as the probate process is complicated and not as straightforward as you may think.

Plan For Incapacity

It is not just about death, but also about being physically incapacitated. In these situations, you will already have a plan in place regarding your well-being and selected beneficiaries that will take care of medical decisions and business matters for you. 

Can Reduce Taxes

There are ways proper Estate Planning can help you save money on your taxes. Like you can reduce taxes by gifting assets into an Irrevocable Trust. For more tax information go to

https://www.thebalance.com/benefits-advanced-estate-planning-3505076

Take Care of Your Children

You most likely want to leave something behind for your children, and an Estate Plan will make sure that your children are able to maintain their standard of living after you’re gone. An Estate Plan can also detail who will care for your underage children if you pass away or become unable to care for them. So, saving your children from foster care is one of the big pluses of having a Trust-based plan. And if you are the parent of a child with special needs, there are Special Needs Trusts that are very specifically made to make a detailed plan of your child’s care after you pass.

Peace of Mind

Above all else, you want to make sure your family and loved ones are taken care of. You don’t want to worry, and you want to continue your family’s legacy. Don’t stress; we will make sure you have a detailed comprehensive plan in place so that you can have peace of mind.

Soo, ¨when should I start an Estate Plan?¨ how about you Start Now.