In the mind of most, estate planning is relegated to those approaching or within retirement age, with the financial health needed to think about wealth management, asset allocation, and eventual inheritance issues. However, there’s really more to estate planning than meets the eye – and the argument can be made that young couples should think about investing in estate planning tools just as much as their older counterparts, for different as well as many of the same reasons.
It cannot be denied that estate planning is far from a priority for most Americans. Only an estimated third of Americans with young children even have a will, let alone more complex estate plans. Yet contrary to popular belief, many Americans stand to benefit from even just a simple or rudimentary set of estate planning measures, given that they’re ready to work through the issues at hand with a professional.
In order to start benefiting from estate planning as a young couple, it’s important to know what an estate plan can do for you.
An estate plan is a series of documents outlining your wishes in regard to how your property should be controlled and distributed after death. An estate plan can also be used to outline how you wish to be treated in the case of certain medical conditions, who doctors and creditors should answer to should you be found incapacitated yet alive, and who should take care of your young children should you pass away before they become adults.
More than just a way to settle inheritance issues and avoid massive estate taxes, estate plans are designed to be simple documents that, in most cases, allow individuals with a modest income and a few assets to determine who gets what, and who makes what decisions, should they pass away.
While estate plans are stereotypically the tools of the wealthy, it’s important to note that young couples – especially those with an interest in starting a family, or those with young children at home – have an interest in clearly stating how they would like their property to be distributed after death, just as they should take the time to determine who should take care of their children, and who should make critical financial and health care decisions for them in moments of incapacity.
It’s difficult to face your own mortality, and much more so when still young. And it’s understandable that the very last thing any young couple or newlywed couple wants to do is think about how one or the other could die, and how that might affect their life. Yet it’s critical to prepare it either way.
Without a will or estate plan in place, a person’s belongings go through a probate process according to the state’s laws on intestacy.
This essentially requires the state to determine who gets what, based on a rigid ruleset that divides all of the deceased’s assets between the spouse and children, or any other next of kin. Partners, fiancés, stepchildren, and other individuals without clear legal or blood relation likely will not receive anything, often not accurately reflecting the wishes of the decedent.
While estate planning tools do exist to help the very wealthy largely reduce the tax impact of inheritance and cut down on the length and expense of the mandatory probate process, plenty of estate planning tools are just as effective in helping families make critical decisions about how they want their belongings to be distributed after death, and how they want their children to be cared for.
Other reasons to consider an estate plan include probate in California. While the California probate process is not the longest or most expensive in the country, it can still be tremendously tedious without proper preparation and the know-how to work towards an expedited process.
Many also underestimate the financial impact of becoming mentally incapacitated without a proper plan in place. Without the documents needed to instate a trusted individual as your representative with power of attorney privileges, becoming temporarily incapacitated can turn into a nightmare scenario in the long-term.
For those who do decide to dabble in estate planning, yet do so through free templates and programs, it’s important to note that even the slightest clerical error can have serious ramifications down the line.
The primary goals of an estate plan are to limit the length and cost of probate and grant greater controls over critical life-changing choices, from financial and healthcare choices to choices regarding one’s own children.
For young couples in California seeking to set up their own estate plan, these are all good reasons to start. But it’s important to take note of some basic do's and don’ts.
While California’s probate process can be lengthy, the state does not have any inheritance taxes. Furthermore, estate taxes do not go into effect until a person’s total estate is valued at over $11.4 million per individual in 2019.
While this can (and will) change, any estate plans currently being built should take into consideration that it is unlikely for most individuals to require strenuous estate planning measures to avoid the bulk of the taxes associated with dying and passing on any existing wealth.
However, as mentioned previously, the laws surrounding estate taxes are subject to change, and the tax code is amended several hundred times a year. It’s generally advised for individuals and couples – including young couples – to review and potentially revise an estate plan every year, or whenever an event drastically changes one’s estate planning goals (the birth of a new child, the death of a family member, marriage, divorce, alienation, etc).
Founded in 1975 by L. Rob Werner and serving California for over 48 years, our dedicated attorneys are available for clients, friends, and family members to receive the legal help they need and deserve. You can trust in our experience and reputation to help navigate you through your unique legal matters.
Whether you need help creating a living trust or navigating probate, our living trust law firm's compassionate team of estate planning lawyers and probate lawyers are here to help you and ready to answer your questions.
Our goal is to make your case as easy as possible for you. Hiring a lawyer can be a daunting task, but it doesn’t have to be. From the moment you contact our firm, through the final resolution of your case, our goal is to make the process easy and understandable. We cannot change the fact that probate is a long and complicated process, but through our Werner Law Firm Difference, we strive to go out of our way to keep you informed of your case through every step of the way. We are constantly refining our processes and procedures for a more streamlined and calm client experience. Our goal is to have you feel like a burden was lifted from your shoulders, and that we made the whole process an easy one
If you're dealing with a legal matter, we urge you to schedule a free initial appointment today and join the many satisfied clients who have contacted Werner Law Firm.
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