We have all heard that there are only two certainties of life. Most people don’t relish the ritual, but they are fully prepared for one of them when April 15th rolls around. Strangely enough, a very significant percentage of the same folks have made no plans for the other inevitability that we will all face.
Studies are periodically conducted to gauge the estate planning preparedness of adults in the United States. One of them was done by Caring.com relatively recently, and the statistics are not very encouraging. In all, only 42% of American adults have a last will or living trust in place to facilitate postmortem asset transfers.
When you drill down by age groups, these statistics become all the more interesting. As you might imagine, people that are 72 years of age and older have the highest level preparedness at 81%. Still, this means that almost 20% of them have been remiss.
Only 60% of people that are between 53 and 71 years of age have estate planning documents in place, and more than six out of 10 members of Generation X do not have a will or a trust. Individuals that are between 18 and 36 are referred to as millennials, and a mere 20% of people in this age group have wills or trusts.
Food for Thought
The fact that younger people assume that they will have time to think about estate planning later on is understandable. And in fairness, a young adult with limited resources and no spouse or significant other or children is not putting anyone at risk by rolling the dice without an estate plan.
However, the dynamic is entirely different for young adults with families of their own. It can be argued that estate planning is more essential for people in this age group than it is for many senior citizens. After all, the children of seniors are adults in their own right, but young parents have dependent children still in their homes.
If you are a young parent, you should definitely have an estate plan in place. One component of the plan would be the selection of a guardian that would care for your child or children if both parents were to die suddenly. This is important for couples that could pass away together in an accident, and the need is even more profound for single parents.
The vast majority of young families depend on two incomes to make ends meet, and this is another major consideration. Sufficient life insurance is an absolute must to serve as an income replacement vehicle.
An asset transfer device like a will or a trust should certainly be part of the plan, and it should include special provisions that would protect minor children in the event of the death of the parents.
Incapacity planning is another piece to the puzzle. A living will is a document that can be used to state life-support preferences, and a durable power of attorney for health care should be added. This document empowers an agent to make medical decisions on behalf of the grantor if it ever becomes necessary.
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We have provided a very broad overview here, but the point is quite clear: if you are going through life without an estate plan as a young parent, action is required sooner rather than later. The ideal plan will depend upon the circumstances, and this is why personalized attention is key.
An attorney from our firm would be more than glad to gain an understanding of your situation and help you take the appropriate steps to make sure your family is fully protected come what may.
You can schedule a consultation right now if you give us a call at 310-337-7696. There is also a contact form on this website that you can use if you would prefer to send us a message. If you reach out to us electronically, you can expect to receive a rapid response.