Why Young Families Should Do Estate Planning ASAP
People often associate estate planning with senior citizens or wealthy couples with significant assets. The truth is that everyone, regardless of age or wealth, needs the financial benefits and protections that estate planning provides. Let’s discuss why young families should do estate planning decades before retirement age, including practical steps you can take immediately to protect your spouse and loved ones.
TABLE OF CONTENTS
- 5 Reasons Why Young Families Should Do Estate Planning Sooner Rather Than Later
- 1. Your Children Are Relying on You.
- 2. You Might Have to Rely on Your Children.
- 3. You Own More Than You Think.
- 4. Early Planning = More Options.
- 5. You Can Stop Conflict Before It Starts.
- Why Young Families Should Do Estate Planning at Yolofsky Law
5 Reasons Why Young Families Should Do Estate Planning Sooner Rather Than Later
Many new parents consider themselves “too young” for estate planning. Unfortunately, life is unpredictable, and accidents or illnesses can happen at any age. Estate planning provides a framework to address these unforeseen events. It allows young families to prepare for worst-case scenarios, ensuring that loved ones are protected and financial transactions are managed according to their wishes.
Here are five good reasons why young families should do estate planning as soon as possible:
1. Your Children Are Relying on You.
One of the primary reasons why young families should do estate planning is to ensure their children’s well-being in the event of unexpected circumstances. If something were to happen to you, your children could lose:
- Their home. Without a legal guardian named in a will, the court will decide which of your relatives will raise your kids to adulthood. Estate planning empowers you to designate guardians for your minor children, making sure they are cared for by someone you trust. You can also ensure siblings stay together (instead of being raised in different houses), attend the same schools, and continue living in the family home.
- Their property. Without a trust or will to spell out your wishes for your property, Florida intestacy laws dictate how assets are distributed. If your children are under 18, other relatives could take possession of personal family items, including furniture, cars, or heirlooms, upon your passing.
- Your financial support. Court-appointed guardians may mismanage the estate, spending the money that should be used to support your children.
Solution: Last Will and Testament
A will can specify who inherits specific assets, ensuring that sentimental belongings or financial resources go to the intended beneficiaries. It also appoints a trusted relative as the personal representative of your estate—the person responsible for distributing your property and carrying out the terms of the will.
If your chosen guardian cannot serve or needs time to travel, your children could wind up in the care of an untrustworthy relative or Child Protective Services (CPS). At Yolofsky Law, our young parents’ estate plan includes a full Kids Protection Plan® that takes effect immediately upon your incapacitation. Provisions include appointing a short-term guardian to take custody of your children.
2. You Might Have to Rely on Your Children.
Who would make decisions if you and your spouse were incapacitated at the same time? This goes beyond making decisions for your children. Who decides what will happen to you? Making medical choices ahead of time that reflect your personal beliefs and values can provide peace of mind in a medical crisis.
Solution: Advance Healthcare Directives
Both parents in a young family should consider creating advance directives, also called a living will. A living will outlines specific instructions regarding medical treatment preferences, particularly end-of-life care decisions. This gives your family clear directions on what you want to happen, sparing them from difficult decisions.
3. You Own More Than You Think.
Even young families typically have assets such as a home, savings, investments, and possibly debts like mortgages, student loans, or credit cards. Estate planning allows individuals to outline how these assets and debts should be managed and distributed in the event of incapacity or death.
Solution: Revocable Living Trust
Unlike a will, a living trust provides ongoing asset management without the need for court supervision (probate), which can be time-consuming and costly. A trust would preserve financial assets for your children until they reach a certain age or milestone. With your children as designated beneficiaries, the funds in your trust must be used for their upbringing, education, and other needs.
4. Early Planning = More Options.
Estate planning goes beyond drafting a will. For example, does your family have the resources to cover your end-of-life costs? Will your heirs be hit with high tax bills before they receive their inheritances? A comprehensive approach addresses all aspects of your estate, including practical concerns and asset protection.
Solution: Tax Planning and Beneficiary Designations
Proactive tax planning can help young families take advantage of exemptions and deductions. Estate tax thresholds are high, but certain strategies can minimize estate taxes and maximize the wealth passed on to your heirs.
Designating beneficiaries ensures that assets pass directly to intended recipients outside of probate, providing your relatives with immediate resources. Parents should review and update beneficiary designations on their retirement plans, life insurance policies, investments, and bank accounts.
5. You Can Stop Conflict Before It Starts.
Proper estate planning can help minimize potential conflicts among family members. Clear instructions and legally binding documents can prevent disputes over inheritance or asset distribution, which can otherwise strain relationships among surviving family members.
Solution: Powers of Attorney
A financial power of attorney permits the person of your choosing to manage your finances if you are unable to make decisions independently. This document ensures that bills can be paid, investments can be managed, and other financial matters can be handled without interruption while you are incapacitated.
A healthcare power of attorney permits the person of your choosing to make medical decisions for the parents if they cannot do so due to incapacity. This document ensures your medical treatment preferences are known and followed, especially in emergencies.
Why Young Families Should Do Estate Planning at Yolofsky Law
Like your family, an estate plan is a living thing. Changes in personal circumstances, tax laws, or financial goals may necessitate updates to estate planning documents. You should periodically review your plans to ensure they remain relevant and effective—especially after significant life events. There’s nothing like the peace of mind that comes from having a well-thought-out estate plan in place. Let us create a comprehensive plan that provides for your loved ones now and into the future. Email us at hello@yolofskylaw.com today or schedule a 15-minute call to get the ball rolling.