There are many reasons why people of any age should get an estate plan. Even young people have certain unique needs that mean they can benefit from having their plans in order. Whether you have minor children, have non-traditional relationships in your life, a desire to leave money to charity or any of a variety of other reasons, chances are you have one or more reasons why you, as a young person, have an immediate need for a plan.
Summertime means a time of transition for many young people. Some may have just graduated high school and be headed to college. Others, who have just graduated high school or college, are transitioning into the world of work. Still others may be newlyweds, having followed the old tradition and tied the knot in June.
Whatever new doors are opening, it is important for you as a young person (or as the parent of a young person) to step back and realize that these changes represent a great time to get an estate plan in order. Some statistical surveys show that more than three-quarters of people under age 36 have no plan. Even though you undoubtedly feel like you have a million things more important than estate planning, that thinking is mistaken. Here is a list of a few of the main reasons why getting a plan now is so important:
Unfortunately, serious medical traumas can hit anyone of any age. If one should strike you, you'll need to be prepared. The way to do that is with what's called “powers of attorney.” These two documents (your power of attorney for financial matters and your power of attorney for health care decisions) allow you to designate the person that you want to make decisions about your money or, especially, your health and personal matters when you cannot speak for yourself. With no powers of attorney, your family may have to go through a potentially difficult, time-consuming and expensive court procedure known as guardianship.
These documents can be especially important if there are complications between you and your parents, who are often first in line to receive decision-making authority under a guardianship. In one famous 2007 case, an incapacitated man's parents obtained a guardianship over their son (who had suffered a ruptured aneurysm) and denied the incapacitated man's long-term partner visitation because they opposed the couple's same-sex relationship. The partner had to take his case all the way to the state Court of Appeals just to get to see his partner in the hospital. Whether you are in a similar situation to this incapacitated man (such as an LGBT issue or an estrangement from your parents) or have some other element making your personal/family relationships “non-traditional,” estate planning is extremely important for you so that you can be in control and have the people you want making your decisions.
No young person likes to think about dying, but tragically, some people do die very prematurely. Regardless of your age, if you die with no estate plan in place, whatever assets you own will go through the legal process known as intestacy. Intestacy means that your assets are distributed according to a pre-set plan devised by your state's laws. For an unmarried young person with no children, that often means than 100% of your assets going to your parents. For some young people, this might be an acceptable outcome. For many others, though, their goals might be different. Maybe you have a committed relationship partner to whom you're not married. Maybe you wish to leave part of your estate to a charity. (In either of these circumstances, intestacy would leave them nothing.) Or maybe you have an estranged relationship with your parents. For any of these circumstances (among numerous others) that make your goals something different than “100% of my assets to my parents,” then you have a particularly high need for a plan.
Unlike many seniors, who often are focused on estate planning, many young adults have one aspect of their lives that makes them especially in need of planning: their children. If you have minor children, especially if you are a single parent, you need a plan. With an estate plan, you can designate the person you want to care for your children if you die or become incapacitated. Without this planning (which is contained in your last will and testament) a judge will have to make this decision with no input from you.