Think You Are Too Young to Need an Estate Plan? Think Again
The pandemic has caused Americans to change their behavior in a variety of ways, and one of the most positive of these changes is related to estate planning. For the first time since the study’s inception, Caring.com’s 2021 Wills and Estate Planning Study found that young adults are now more likely to have an estate plan than middle-aged adults.
The study found that in 2020, only 16% of Americans aged 18 to 34 self-reported having a will or another estate planning document in place. In 2021, that percentage rose by 10 points to 26%. This is huge progress! Since young adults are traditionally the least likely population to engage in estate planning, the study’s results are particularly encouraging for this demographic. The shift in behavior is largely due to the pandemic, with 45% of the 18 to 34-year-olds surveyed reporting that they were motivated by COVID-19 to get their estate plan started.
Surprisingly, the data for those aged 35 to 54 with an estate plan actually decreased year-over-year, from 27% in 2020 down to 22% in 2021. While many of us have estate planning on our to-do lists, the data doesn’t suggest that there was as large of a swing of individuals in this cohort putting estate plans in place over the past year. Though many of us know it shouldn’t take a global pandemic to motivate ourselves to take estate planning seriously, not everyone understands the true importance of putting an estate plan in place (or what could happen if they fail to do so). What is also interesting about his group is that many of these individuals are likely to have minor children (the average age of a first-time mom in San Francisco has been hovering around 31-32 years of age).
And while a customized estate plan is particularly important for those with minor children, all adults over age 18 should have some basic estate planning documents in place. And this is true regardless of how much money you have, whether you are married or single, and whether you have kids. On that same note, if you are an adult of any age and the pandemic didn’t inspire you to create your estate plan, here are six reasons why you shouldn’t wait another day to get your plan started.
1. Incapacity Leaves You Vulnerable
Most people assume estate planning only comes into play when they die, but that’s dead wrong (pun intended). Although planning for your eventual death is a big part of the process, it’s just as important—if not more so—to plan for your potential incapacity due to a serious accident or illness.
If you become incapacitated without an estate plan, your family will have to petition the court to appoint a guardian or conservator to manage your legal, financial, and medical affairs. This process can be extremely costly, time-consuming, and traumatic for everyone involved during the grieving process. Plus, the court can appoint a family member you’d never want in control of such crucial decisions (#FreeBritney), or the court can appoint a professional guardian, which gives a total stranger nearly complete control of your life and your assets.
An attorney can help you put estate planning vehicles in place that grants the person(s) of your choice the immediate authority to make your medical, financial, and legal decisions for you in the event of your incapacity. We can also implement estate planning strategies that provide specific guidelines detailing exactly how you want your medical care to be managed during your incapacity, including critical end-of-life decisions.
2. Control Who Inherits Your Assets
If you die without an estate plan, the court will decide who inherits your assets, and this can lead to all sorts of problems. Dying without a plan can cause your surviving family members to get into an ugly court battle over who should inherit your property. You may think this would never happen to your loved ones, but we see families torn apart by it all the time, even when there’s little financial wealth involved.
Who is entitled to your property is determined by the state’s intestate succession laws, which largely hinge upon whether you are married and if you have children. Spouses and children are given top priority, followed by your other closest living family members. If you’re single with no children, your assets typically go to your parents and siblings, and then more distant relatives, if you have no living parents or siblings. If no living relatives can be located, your assets may end up going to the state.
If you’re married with children and die with no estate plan, you might think things would go fairly smoothly, but that’s rarely the case. If you and your spouse both die, you risk leaving assets to children who aren’t old enough to manage them, requiring a long-term professional guardian to step in to manage assets. If you’re married but have children from a previous relationship, would your assets be distributed in the way that you would want between your spouse and your children?
Moreover, it’s important to note that state intestacy laws only apply to blood relatives, so your unmarried partners and/or close friends will get nothing if you fail to create a plan. If you want someone outside of your family to inherit your property, having an estate plan is an absolute must.
3. Keep Your Family Out of Court and Conflict
If you don’t have an estate plan—or if you only have a will (yes, even with a will)—you will likely be forcing your family to go through probate upon your death. Probate is the court process for settling your estate. With no plan at all, probate can be a total nightmare for your loved ones. Even if you have a will, it’s notoriously slow, costly, and public.
Depending on the complexity of your estate, probate can take many months or years to complete. And like most court proceedings, probate is expensive. In fact, once all your debts, taxes and court fees have been paid, there might be nothing left for your loved ones to inherit. And if there are any assets left, your family will likely have to pay hefty attorney’s fees and court costs in order to claim them.
Outside of these issues, the most burdensome part of probate is the frustration and anxiety it can cause your loved ones. In addition to grieving your death, planning your funeral, and contacting everyone you’re close with, your family will also be stuck dealing with an overloaded court system that can be challenging to navigate, even in the best of circumstances. Plus, the entire affair is open to the public, which can make things all the riskier for those you leave behind if the wrong people take an interest in your family’s affairs.
4. Minimize the Mess
Entirely separate from anything to do with court, consider the reality of the confusion you’ll leave behind if you do not plan. Imagine your family or friends trying to figure out what you own, where it is, and how to access it. Look at the physical space around you, all of the stuff… what do you want to happen to it, what guidance do you want to give them? If you become incapacitated, do they even have the authority to step in to handle it? Or if you have not created a customized estate plan complete with an asset inventory… what will they find?
That’s the reality of the kind of mess you are subjecting someone you love to deal with if you do not get your affairs in order now.
5. Ensure Your Kids Are Raised by the People You Trust
If you’re the parent of minor children, the most devastating consequence of having no estate plan is what could happen to your kids in the event of your death or incapacity. Without a plan in place naming legal guardians for your kids, it will be left for a judge to decide who cares for your children. This can cause major heartbreak for your children and entire family. Your #1 planning priority should be naming legal guardians to care for your children if anything should happen to you. Simply naming legal guardians won’t keep your family out of court, as a judge is always required to finalize the legal naming of guardians in the event of death or incapacity of parents. You need to give the judge a clear direction.
We’d like to know that a judge would select the best person to care for your kids, but it doesn’t always work out that way. In fact, the judge could pick someone from your family that you’d never want to raise them to adulthood. If you don’t have any family, or the family you do have is deemed unfit, your children could potentially be raised by total strangers.
On the flip side of the coin, if you have multiple relatives who want to care for your kids, they could end up fighting one another in court over who gets custody. This can get extremely ugly, as otherwise well-meaning family members fight one another for years – making their lawyers wealthy while your kids are stuck in the middle.
Additionally, you need to take steps to keep your kids out of the care of strangers if your long-term guardians are not local. And note MOST estate plans—even those created by lawyers—skip over this critical step because most lawyers aren’t well-trained on how to create plans for families with minor children.
6. Stop Making Excuses
While many people said that the pandemic inspired them to see a greater need for creating an estate plan, the 2021 Caring.com study also found that more than one in three Americans still don’t think that estate planning is important, or they haven’t even thought about it at all. As we’ve outlined here, not having an estate plan can be incredibly traumatic and costly for both you and your loved ones, who are forced to deal with the mess you’ve left behind.
Fortunately, the expense and drama of the court system can be almost totally avoided with proper planning. Using a trust, we can ensure that your assets pass directly to your family upon your death or incapacity, without the need for any court intervention. As long as you have planned properly, just about everything can happen in the privacy of our office and on your family’s time.
As your trusted attorney, I will guide you step-by-step through the planning process to ensure you’ve taken all the proper precautions to spare your loved ones from needless stress, conflict, and expense. I can help you create a plan that distributes your assets in the exact manner you wish, taking into account your family dynamics and other contributing factors so that your death won’t be any more painful or expensive for your family than it needs to be.