Tragedies like the recent death of Kobe Bryant, his 13-year-old daughter, the other young parents, and some of their children bring home the tragedy of thinking you are too young to do estate planning. Hopefully, these parents had done estate planning to protect the settlement of their estates for the loved ones left behind. So many times, however, that has not happened because the parents didn’t believe they were old enough to think about this. Or, commonly, younger people believe estate planning is too expensive for them to take on at this stage in their lives. Neither of these things are true!
The Greatest Need For Estate Planning
The greatest need for estate planning is presented for parents with minor children. If something happens to both parents in an accident, remaining loved ones will be faced with creating guardianships of the person (to provide for the actual care and physical needs of the children), and of the estate (to deal with property or money for the benefit of the children). To compound this bad situation, the guardianship of the estate in Texas ends when each child turns age 18. How many 18 year olds would you want to have control of any substantial amount of money or property?
The Benefits Of Estate Planning
The solution is to draw up a will with trust provisions or a living trust, and to specify in your will who you would want to serve as guardian of the person of your children. A guardianship proceeding still would be required, but at least you can express your wishes about who the guardian should be. Texas law sets out a list of relatives who have preference in consideration for appointment as guardian of the person if you fail to specify who you would want to serve. The person favored by law may not be the person you would wish to serve if you fail to provide for this in a will. The court can override your designation if it feels that person is highly inappropriate, but this rarely ever happens.
If you set up trusts for children in your will, you can avoid the complications of a guardianship of the estate. The trustee you name will control any inheritance left in trust. The provisions you make for trusts to hold assets for your children can extend the age when they would receive distribution far past age 18, provide for periodic distributions at different ages, and place restrictions on their receipt of funds from the trust. For instance, many parents set out provisions that the child attend a minimum number of class hours and maintain a minimum GPA to receive funds while in college or other post-high school education. Other parents require drug testing to ensure the children remain drug-free while receiving trust funds.
At What Age Should You Start The Estate Planning Process?
Estate planning is a wise step at any stage in life when you acquire assets that are not subject to distribution based on payable on death or beneficiary designation. Even as a single person, estate planning is smart because if you do not have a will, Texas law provides for your estate to pass to your parents. They certainly may not be the people who need or want your assets. If you are in a relationship with someone else, or if your siblings would benefit from your inheritance, you would want to provide for them in a will.
Start Planning Early & Review Periodically
Some younger people put off estate planning because they know their family and financial situation may change drastically through the years. It is still better to start early to avoid unnecessary probate and inheritance complications and simply review your plans as time goes by. An estate plan should be reviewed periodically if:
- You acquire significantly more assets
- A new life event such as a marriage, divorce, or birth of a child occurs
- You want to make provisions for someone else significant in your life
- You want to make a charitable bequest
- You want to add trust provisions to govern receipt of inheritance
Your will can be amended by either adding a codicil (which really is just an amendment), or if the changes are major, by drawing up a new will.
What Is The Cost Of Estate Planning?
A simple will, even with trust provisions, usually ranges from $500-$750. The amount of money that would be required to settle your estate if you have no will would be many times this amount. It’s money well spent, even if you need to save up to pay for it!
If you need to consider estate planning for yourself, please contact Adair M. Buckner to discuss your options.