Estate plans answer three essential questions: who gets my stuff after I’m gone, who takes care of me medically and financially if I can’t make those decisions, and who will take care of my children if they are minors? Being old and rich doesn’t fit into the equation. Being concerned about your future well-being and that of your children doesn’t have an age limit.
Children Need Protection
Parents with minor children need to be aware of the risks their children face by not having an estate plan in place. Life insurance is a great way to make sure your family will have funds if anything were to happen. But if those funds are going to minors the court may have to manage all of those funds until the child reaches age 18, and then pay out the entire amount to the new adult child. This situation limits the ability of the guardians to use the funds before the child turns 18. Additionally most 18 year olds aren’t prepared to handle significant assets, like a large bank account. Parents can ensure the guardians will have the ability to provide for their child’s needs, and have a guiding role later in life by setting up a trust to hold life insurance funds and other assets from the estate.
Incapacity Isn’t an Age Problem
Medical problems, as our president is fond of pointing out, aren’t limited to the elderly. When the unexpected tragedy arrives you can find yourself in legal limbo if you didn’t prepare ahead of time.
Imagine a young man entering the E.R after crashing his motorcycle. With a severe head injury, he is in a coma, and needs to stay in that coma for various medical reasons. His girlfriend is nearby, but can’t get any information out of the hospital staff since she’s not related. His parents are on the other side of the country, and can’t come out immediately. With an Advance Health Care Directive in place, this young man could have ensured that the person he wanted making medical decisions for him has the ability to get information from the doctors, and make important decisions while he is unable to communicate.
In the meantime, the rent is due and bills need to be paid. Because the accident was the other person’s fault, a lawsuit needs to be filed, but needs his signature. If he had a Power of Attorney in place, his agent could handle all of those matters, and more.
You Might Have More Stuff Than You Think
Once you step into the role of homeowner, a proud moment for sure, your estate takes a gigantic jump in size, no matter how small your initial investment for the down payment is. The reason? Probate fees are based on the gross value of your real estate.
Don’t stumble into the pitfall of thinking you are too young for an estate plan. Your children need protection. You need to protect yourself in case of incapacity. And, you may have more to pass on than you think.
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