5 Estate Planning Tips for Families Under 40

                We under 40 often think that estate planning isn’t necessary. That is something our parents need to be concerned about. Sadly, this could not be further from the truth. As we learn all too frequently, life is unpredictable. Having an estate plan in place is important to ensure that your wishes are met and your family is taken care of regardless of your age or net worth. Here are a few estate planning tips which everyone would benefit from but are a necessity for any young family.

1.       Start your planning now.  As much as we prefer to avoid it, it is important to plan for the worst case scenario. We see it frequently in our line of work and the implications can make a devastating time for a family even more burdensome. Most of us under 40 are still working long days (and often nights) trying to build a life for our family, keep up with the ever increasing expense of doing so and pay off debt. We may not have a ton of money in our savings or retirement accounts. Regardless, an estate plan is the best way to ensure your family will be taken care of if you are not here to do so and that the financial assets available to them are used in the best possible manner.

2.       Develop an estate plan to meet your needs.  At the least, everyone should have a basic estate plan. There are three components to a basic estate plan. The first is a will. A will sets out how you want your life’s work to be provided to your family. It may be as simple or complex as needed to meet your needs. The second component is a Power of Attorney. A Power of Attorney can be set out three different ways. You may have a Power of Attorney over health care, a Power of Attorney over financial matters or a Power of Attorney which covers both in the same document. These documents allow another to stand in for you if you are unable to make your medical or financial decisions. You will designate if you want these documents to be effective immediately or only become effective upon the assessment of two licensed physicians. The final component of your basic estate plan is the Living Will.  A Living Will outlines the measures you desire your health care professional to take in the event you are unable to provide or withdraw consent for your care. While the Power of Attorney over medical allows your agent to make decisions on your behalf, they are bound to comply with the terms set forth in your Living Will. These three tools are important to outline your desires and how you want your assets to be addressed for your family. While cost may be a big concern, a basic estate plan is not as costly as most think. Many people run to online sources to obtain these documents. Often the expense paid for a universal template online is comparable in price to an individualized and enforceable plan with the assistance of a knowledgeable estate planning attorney.

3.       Develop a plan to meet the needs of your loved ones.  We under 40 are often parents of young children. We especially hate to think of the worst happening to our family but it is imperative for us to plan for just that to protect our children. The most important consideration is who you would want to care for your children if you and your spouse are unable to do so. This may be the most important decision you ever make so take your time and ensure you are comfortable with your choice. Keep in mind you can revise your plan if circumstances change and you feel another may be a better fit for such an important role. Also consider how you want your children to be cared for financially. Do you want all of the funds you have set aside to care for your child to be handed over to the caregiver or safely stored away and managed in a trust?

Many families choose a trust which provide them more control over how the funds are distributed to their children. The funds are managed by a Trustee who follows the outline of your will in providing those funds to your children or their caregiver until they reach the age you designate in your trust. Parents often desire for the trust to remain in effect after the age of eighteen. While we may be adults at eighteen, that doesn’t mean we always act like it. Protecting our children, even if it is through the terms of a trust, may be necessary well beyond eighteen years of age. A trust, much like your will, can be as simple or complex as you feel best meet the needs of your family.

4.       Give yourself the peace of mind insurance provides.  One of the many advantages of starting your estate plan early is the lower expense of term life insurance. Life insurance is a relatively low expense that can provide significant security to your family if you are no longer here to care for them. We young families depend on life insurance to fund our estate plans and to care for our children for years to come. It may be beneficial to also consider disability insurance. If you do not have these important tools in place, it is highly recommended you meet with a reparable insurance agent or financial planner to evaluate your options and the expense related. You will likely be surprised at how affordable they are.

5.       Review your estate plan annually.  We at King & King pride ourselves on building relationships with our clients because your estate plan should evolve with you throughout your life. All too frequently clients develop their plan then store it away to be forgotten. Sadly, these situations typically do not end well. We end up in probate court trying to sort out issues which could have been easily, and much more affordably, addressed with a minor revision to an estate plan. It is recommended that you pull out your plan and thoroughly review it annually. The beginning of the year each year is the perfect time. It is when we are thankful for what we have and plan for the coming year. Your estate plan should reflect just that as well. Most revisions are a minimal expense and accomplished by a phone call to your estate planning attorney and brief meeting to finalize the revision. An hour or so of your time may save your family thousands by avoiding an issue in probate court.

                Developing an estate plan for our family is often not at the top of our long to do list but it is important to consider. Failing to do so can have huge implications for your family. We here at King & King work hard to make the process as time efficient and painless as possible. We understand the dynamic of your family, we live it every day, and can help ensure that your family will be appropriately cared for through your estate plan. Please give us call. We can discuss your family in detail and what estate planning tools may best serve you. If you have an estate plan, please pull it out and review it. We are happy to discuss revisions to your plan that may be needed even if we were not the original drafters.

                We are here when you need us at 731-664-6864. You may also email me directly at april@kingplc.com if I can assist you in any way. To learn more about us at King & King and the various services we provide to families visit our website at www.kingplc.com.