Estate planning is one of the most important things that not enough people do. A survey conducted by Caring.com in 2017 found that nearly 60% of American adults said that they don't have a will or a trust. While these numbers may have elevated slightly due to the COVID-19 pandemic – which exposed the need for estate planning - they haven't increased by enough to break headlines.
Pandemic or not, the fact is that a lot of people hold off on estate planning for longer than they should. In most cases, the hesitancy boils down to three factors: age, health, and wealth. For the hold-outs, the belief may be that they are still young, healthy, or don't have enough assets to worry about estate planning right now.
The thing is, there's never a better time to start your estate plan than right now.
If you are young and healthy - consider that a bonus: you have the benefit of time and energy to invest in a well thought-out estate plan. At a very minimum, every young person turning 18 needs a Power of Attorney and/or an Advance Health Care Directive – since that newly-minted adult's parent(s) can no longer take care of property or medical decisions once a child turns 18.
If you don't have a lot of wealth to your name, that's fine too: you can start your estate planning by setting up a Power of Attorney, an Advance Health Care Directive and perhaps, a Will, and as your assts grow in the future – you'd be wise to add a Living Trust to your estate planning portfolio.
Ultimately, most everyone should have these estate planning documents in place:
- Advanced Health Care Directive
- Power of Attorney
- Living Trust
- Pour-Over Will (or, a Testamentary Will – if a Trust is not needed)
Conversely, if you are approaching retirement and especially if you are experiencing health issues, and you own a home and financial assets, you might wonder if right now is still a good time to start your estate plan? Yes - right now is the right time - if you haven't done so up to this point, or if your estate plan is over 7 years old.
This is because an unexpected medical event (a stroke, or a COVID diagnosis/complications) might compromise your physical and mental capacity, and render it impossible for you to sign legal documents. Leaving estate planning for the very end (known as “death bed planning”) is the worst, as it is often the source of bitter litigation when the signer's mental capacity is challenged and the legal documents cannot be property prepared and formally executed.
Estate Planning is best done when you are well and healthy.
Estate Planning Milestones
You may come across certain milestones in life where it makes sense to create, add to, or adjust your estate plan. Such milestones are great reasons to consult with an attorney on what is best for you to do.
Having children is one such milestone because, up until this point, you had no reason to worry about guardianship of minors. Now that a child is in your life, you should choose a legal guardian (rather than the State) to raise your children should you pass away before your child turns 18, as well as a Trustee to manage your property for your child's benefit and make distributions – perhaps when a child is older than 18.
Another milestone worth considering is when you've invested a significant amount of money into a home or a business prior to getting married. Setting up a Separate Property Trust to “insulate” such assets from community property creditors, divorce and spousal support, could be a wise thing to do.
Contemplating a second marriage is a great reason to set up a trust to protect your assets and children from the prior marriage, while still providing for your new spouse.
Another milestone is receiving inheritance. You should know the best way to title inherited assts to protect them from creditors, divorce, etc., and to ensure they pass to whom you want upon your death.
Each milestone might necessitate a different TYPE of trust - however, any trust (provided you have property titled your assets in trust) will keep your family out of probate court.
Are You Ready to Get Started?
If you're ready to start the conversation about estate planning, then reach out to the Law Offices of Maria N. Jonsson, P.C. to set up a complimentary consultation. There is no better time than the present to address something as important as estate planning and avoid the ultimate cost - regret.
For more information about how we can help, contact the Law Offices of Maria N. Jonsson, P.C. online.