For many young adults, the consequences of not having an estate plan in place can be dire. Estate planning is not only tax and probate avoidance, but it is planning for your lifetime and incapacity as well.
One tragic case that many people are familiar with is that of Terry Schiavo. Terry Schiavo was a persistent vegetative state for 15 years. During the course of that 15 years, her husband petitioned the courts in Florida to have Terry’s feeding tube removed. This was opposed by her parents. This prolonged legal battle garnered national attention. At the time of her cardiac arrest that precipitated the persistent vegetative state, Terry was 26 years old.
It is these types of situations that many young adults do not consider. They believe that nothing will happen to them, and even if it does, they feel that they do not have the assets to justify the expense of putting together an estate plan and that everything “will work out”. They do not anticipate the potential for prolonged legal battles between loved ones.
Estate planning becomes even increasingly important for those young adults with minor children. Minor children require special planning. A Last Will and Testament is a document where you can name a guardian for your minor child. If you do not name a guardian for your minor child it will be up to the court to decide who will care for your child when you are gone. You also need to be able to decide who will manage the inheritance that you leave to them. An extremely valuable tool to accomplish this goal is a revocable living trust. A revocable living trust is a will substitute that allows you to retitle your assets during lifetime into a trust to make the transfer and management of assets upon your death much easier for your beneficiaries. Through the living trust you can name a successor trustee to manage any assets for your children with whatever conditions you set forth. Many of my clients chose to name a specific age at which their children will have full access to their inheritance. Others choose to have a sprinkling distribution, such as ½ of the inheritance at 21 and the remainder at 30. Still others choose to allow a mandatory distribution of a certain amount of the assets each year until such a time that the full inheritance will go out to the child.
Planning even as a young adult is critically important to protect yourself and your family. A comprehensive estate plan includes a revocable living trust, pour over will, financial power of attorney, health care power of attorney, and living will. Anyone over the age of 18 should strongly consider having at least a financial power of attorney, health care power of attorney, and living will.
Contact a qualified estate planning attorney to counsel you in creating a comprehensive estate plan that can adequately prepare for incapacity and death.