Life is unpredictable. While your circumstances today might make you think you have little need for estate planning, those things can change quickly. The best way to make sure that you and your loved ones are protected for whatever may come is to get an estate plan in place. With a plan in place, your loved ones will know your desires regardless of whether your estate is worth a few thousand dollars or a few million.
In the biblical Book of Proverbs, the writer wisely warns, “Do not boast about tomorrow, for you do not know what a day may bring.” The reality is that none of us are promised tomorrow and, in light of that, it is never too early to begin thinking about estate planning and to make a plan to leave a legacy remembering those who mattered to you most. You might say, but I am only in my 20s, have no children and have amassed very little wealth. That still doesn't mean that that you cannot reap substantial benefits from an estate plan because, as the ancient author so correctly put it, “you do not know what a day may bring.”
A tragic story from Indiana provides a real-life example of this truth. Keri was a young woman in her 20s. She wasn't married and had no children. She had no job and was planning to go back to school. Chances are high that estate planning was one the furthest things from her “to do” list. At around 11:00 p.m. one September night, a driver hit Keri while she was was walking along a road in Anderson, Ind. The first driver injured but didn't kill Keri. However, that driver didn't stop. Another driver came along later and ran over Keri again, killing her. Keri had no estate plan at the time of her death.
Keri's aunt opened an intestate estate and, as the administrator of the estate, sued the drivers' insurance companies for wrongful death. Both companies settled with the estate and paid out monetary settlements. What followed was an extensive litigation that went all the way to the state Court of Appeals. The focus of the legal battle was who should get the money from those two insurance settlements. Keri's aunt, as the estate administrator, argued that the money should be distributed according to the state's Adult Wrongful Death Act. Keri's three half-siblings argued that the court should distribute the money according to the state's intestacy laws. Under the Wrongful Death Act, Keri's mother potentially would receive all of the insurance money. If the intestacy laws were used, then the mother and the three-half siblings would each get 25% of the settlement payments.
The Court of Appeals decided that the Wrongful Death Act's rules for distribution were the ones to use. In this specific case, that meant that the money was outside of Keri's probate estate and was to be distributed according to the statute, regardless of whether or not Keri had an estate plan. Nevertheless, Keri's case highlights the unpredictability of life. Sometimes, the receipt of large amounts of money can happen unexpectedly. So can premature death. It is better to plan and not need your plan for a long time (because everyone will need a plan eventually) than not to plan and have nothing written down when the time comes.