The common wisdom about estate planning says that it’s an old person’s game. No one starts state planning until 50, and even then you aren’t really worried about it.
But this common wisdom is not legally sound. The reality is that estate planning concerns affect everyone. Estate planning lawyers like to say that you need an estate plan as soon as you become an adult. Even then, beginning your state planning efforts before you reach the age of 40 is not something a lot of people do, even though it is a prudent decision. Here’s why people under 40 need to consider estate planning.
Estate Planning and Your Net Worth
A lot of people under the age of 40 are burdened by debt. Many of them don’t have significant assets, and in total they may actually have a negative net worth. In such a situation, these people might wonder what value estate planning might have because their financial position is not very strong.
This belief underlines one of the most common estate planning myths around. Estate planning is not only for the rich or the wealthy. Everyone faces the possibility of needing someone else to manage their property should an emergency arise. You also face the reality that someone will have to be around after you are gone to manage your affairs. Failing to have an estate plan means that you are unprepared for both of these events.
Estate Planning and the Unexpected
For younger adults, estate planning is more about being prepared for devastating, yet very unlikely, circumstances that could arise in the future. Becoming incapacitated as a young person is often more problematic than it would be if it happened to someone older. You probably don’t have an adult child who can quickly step in and manage your affairs if you become ill. Though you might have a spouse and young children, making sure the right person has the ability to manage your affairs takes some planning. This is especially true if, for example, you are single and don’t have someone upon whom you can rely to manage your affairs.
Estate Planning and Your Children
Parents of young children absolutely must consider estate planning as soon as they learn they are pregnant. If something should happen to you, your child will need someone responsible to step in to take on the parenting responsibilities that you can no longer take care of. Who will this be? If you don’t have a plan, you have no say over the answer to that question. If both you and your spouse should become incapacitated, the court could name a guardian of whom you wouldn’t approve.
In short, it is never too early to plan. Just like buying car insurance in case you have an accident, an estate plan offers you and your loved ones protection should death or incapacity strike while you are still young.