I'm Young—Why Do I Need an Estate Plan?

We're all squeamish about death, but we're increasingly overcoming our reluctance to plan for it. Millions of people of all ages and economic levels have taken steps to distribute their money and property according to a sound estate plan. The number of Americans with wills, for example, has grown by 50% in just 15 years. A recent survey by the legal website FindLaw.com determined that about half of all Americans now have wills. This is probably an all-time high.

Another survey, by AARP, found that 60% of Americans 50 and over have wills. As you would expect, the percentage is far higher among the very old. It is also higher in those with more education and greater assets.

Estate planning is emphatically not just for the elderly. One glance at the news demonstrates that far too many young and middle age people die suddenly, often leaving behind minor children who need care and direction. Estate planning needs to be factored into your overall financial plan, along with your children's college tuition and your retirement needs. If your financial or familial circumstances change later in life, it's usually easy and inexpensive to adjust your plan.

Most people also plan for mental or physical incapacity resulting from an accident or illness. Through living wills, living trusts, durable powers of attorney, and health-care powers of attorney, you can control beforehand how you and your property are to be cared for if disaster strikes.

Estate planning also enables you to:

• Determine what happens to your property – who, what, when and how. It enables you to coordinate gifts in your lifetime with bequests in your will or trust. You can apportion property among your family members, your friends, and charities that are important to you. If you don’t have a will or trust, state law will step in and determine how to dispose of your property, in ways that you might not intend.


• Decide whether your business will be sold or stay in the family – and if so who will run it.


• Determine who will be in charge of carrying out your wishes – your executor if you have a will, and your trustee if you have a trust. (In some jurisdictions, executors are known as “personal representatives.”)


• Save money on probate, taxes and other expenses of settling an estate.


• Be in control of your own life. A living trust or durable general power of attorney can provide a way to manage your property should you become disabled. A living will or health care advance directive can set up a plan for your medical care, should you no longer be able to make decisions for yourself.


• Coordinate estate planning with other kinds of financial planning. For example, the new tax law has made significant changes in incentives to save for education (see chapter 22), making this an ideal time to look into planning for the education of children and grandchildren, as well as other financial issues.