In a 2004 survey conducted by
Lawyers.com, the two most frequent reasons adult Americans cited for not having an estate plan were insufficient assets and not being old enough to need a plan. Sadly, those who hold these beliefs are greatly mistaken. With life's ups and downs comes the need for basic estate planning for both the young and old alike. Here are six estate planning tips for young singles and couples that can nonetheless be used by singles and couples of all ages.
1. Don't Rule Out a Prenuptial Agreement
If you're young and don't think that you need a prenuptial agreement before getting married, think again. Many circumstances warrant at least considering a prenuptial agreement, including being involved in a family-owned business or owning your own business; having part of your paycheck stashed away in a 401(k) or other retirement plan; the possibility of inheriting assets from your family; owning a residence that will be used as the marital home; or marrying someone who has already accumulated a large amount of debt. A prenuptial agreement can protect what assets you currently have or significant assets that you expect to inherit, and can also protect you from your spouse-to-be's debts acquired before the marriage.2. Make an Estate Plan for Medical Emergencies
Twenty-six year old Terri Schiavo of Florida certainly didn't anticipate slipping into a coma in 1990 and then having her husband and parents fight over her medical care and ultimate wishes for the next 15 years. Planning for medical emergencies is a must for everyone and should include the signing of two important legal documents called a
Living Will and an
Advance Medical Directive.
3. Make an Estate Plan for Financial Emergencies
If you're out of the country on business and your spouse is at home trying to sell the house, or if you're in an accident and expected to fully recover but will be in the hospital for a while, then you'll need a
Durable Power of Attorney to allow your spouse or other person of your choice to manage your finances and sign legal documents on your behalf.
4. Make an Estate Plan for an Untimely Death
Planning for an untimely death is important, particularly if you're in a committed relationship and/or have young children. If you don't make an estate plan, then the state where you live at the time of your death will make a plan for you, and in most situations the plan won't be what you would have wanted had you taken the time to make your own plan. Aside from this, assets titled in your individual name will need to be probated in order to get them to your beneficiaries after you die. Having at least a basic
Last Will and Testament in place that puts someone in charge of settling your estate and names your preferred beneficiaries and a guardian for your minor children will give your loved ones some peace of mind during a difficult time.
5. Make an Estate Plan for Your Minor Children
Even if you don't think that you have enough assets to need an estate plan, you'll need to make a plan if you have minor children. If you don't, then control of the minor's inheritance will be taken over by a court-supervised guardian or conservator. Then, depending on the laws of the state where the minor lives, when the minor reaches the age of 18 or 21 all of the remaining guardianship funds will be turned over to the young adult, free and clear of any guidance or strings attached. Aside from this, if you and the other parent of your children both die while the children are still minors, then the children will become wards of the court until a judge can decide who the children should live with until they become adults.6. Buy Term Life Insurance
When you're young, term life insurance is really cheap and can offer your family financial security if you were to die prematurely. The insurance proceeds can be used for things such as paying off your outstanding medical and credit card bills; paying off your mortgage; replacing your lost income; paying for your children's care and education; and/or paying for a live in nanny, day care or after school care. Term life insurance is also easy to buy these days with services like
Intelliquote,
Quickquote and
Reliaquote. Or, if you're offered term life insurance at work, buy it.
Everyone Needs an Estate Plan
Estate planning isn't just for the older and wealthy. Younger people, especially those with minor children, need to have a will and estate plan in place in order to give instructions to their loved ones to follow in the event of a debilitating accident or untimely death. Celebrities like Heath Ledger, Anna Nicole Smith, Princess Diana, John F. Kennedy, Jr., Janis Joplin, and Michael Jackson all died unexpectedly, and yet each and every one of them had a will and estate plan. It's just common sense.
