When is the “right” time to put together your estate plan? While there is a common perception that preparing an estate plan is something you do when you start to approach the age of retirement, the reality is that there are plenty of important reasons to put a plan in place while you are in your 20s or 30s.
Why? First, while we don’t often think about it, we could all conceivably die at any time. While most of us hope to (and will) live well into old age, no one can completely write off the possibility of a premature death.
Second, and perhaps more importantly, there are several reasons to have an estate plan besides deciding who should get your property when you die. A comprehensive estate plan will address a number of other important considerations (depending, of course, on your personal family and financial circumstances), and many of these considerations warrant putting together an estate plan in your 20s or 30s.
Consider, for example, the following:
1. Planning for Incapacity
If you get sick or injured, who will take care of your finances and make medical decisions on your behalf? During periods of temporary or permanent incapacity, having an estate plan can help ensure that you maintain a level of control over your financial and health care management. Whether you are injured in a car accident, fall unexpectedly ill, or suffer any other calamity, appointing a trusted family member or professional to make decisions in accordance with your wishes can protect you against unwanted and undesirable consequences. Estate planning tools that can be used for these purposes include:
- Appointment of health care surrogates
- Living wills
- Medical directives
- Powers of attorney
If you are married, can’t your spouse just make these kinds of decisions for you? Yes; however, failing to express your desires leaves room for contentious disputes among family members. The simple fact is that there is no reason not to plan ahead, and having a plan will provide peace of mind for you while protecting your loved ones against the consequences of uncertainty.
2. Protecting Your Assets during Your Lifetime
Preparing an estate plan with the right type (or types) of planning tools can not only serve to preserve your wealth after your death, but it can also serve a valuable asset protection function during your lifetime. By placing assets into a trust, you can shield these assets from most creditors in the event that you get sued or go into debt beyond your means. Different types of trusts provide different levels of protection (for example, generally speaking, irrevocable trusts provide greater asset protection than revocable trusts). But if you have clear estate planning goals and assets you need to protect, you can protect them through the estate planning process.
3. Appointing a Guardian for Your Minor Children
If you have children (or if you may have children in the future), planning your estate takes on heightened importance. One of the most important reasons to have an estate plan as a young parent is to ensure that your children will have an appropriate guardian in the event of your death or incapacity. If you do not appoint a guardian and you become unable to do so due to death or incapacity, then one will need to be appointed through the Florida Courts. This means that you will lose control of deciding who should raise your children in your absence; it means that your children may need to be placed temporarily until a guardian is appointed; and, if your family members disagree as to what is in your children’s best interests, it means that the potential exists for costly and contentious litigation.
As with most aspects of estate planning, in addition to having a plan, you want to have a backup plan as well. By appointing a guardian and a “contingent guardian,” you can account for the possibility of your first choice not being available to serve in the role.
4. Providing Financial Support for Your Children’s Guardian
One challenge people may face with regard to appointing a guardian is that they want to avoid placing a financial burden on the individual or couple who agrees to take responsibility for raising their children. To alleviate this concern, it is possible to leave a gift to your chosen guardian that is specifically set aside for child-related expenses. This gift can range from enough to purchase a car seat to enough to purchase a new car, and it can be subject to any terms and conditions that you deem appropriate.
5. Planning for Future Wealth Accumulation
Many people in their 20s and 30s assume that they do not need an estate plan because they do not have much of an “estate” to leave behind. But, aside from the additional considerations discussed above, putting a plan in place now can ensure that you have appropriate protections in place once you have something more to preserve. Also, many people have more assets than they realize.
A well-crafted estate plan will not be set in stone, and it will not reflect a snapshot of your assets at a particular point in time. Your estate plan can – and should – be designed to retain its relevance and functionality as your family and financial circumstances change over time. Of course, unexpected life events can shift your priorities, and it is always worth revisiting your plan from time to time. But, by putting together an estate plan now, you can avoid unnecessary risk and uncertainty in the years to come.
Schedule an Initial Estate Planning Consultation in Jacksonville, FL
Beller & Bustamante, P.L., is a full-service estate planning law firm with offices in Jacksonville, FL. If you have questions about your estate planning needs, we encourage you to get in touch. To speak with one of our attorneys about your personal situation in confidence, please call 904-288-4414 or tell us how to reach you and we will be in touch shortly.