Reality: If you have any property or people you care about, you’re old enough to consider estate planning.
If you were to become disabled or die today, what would happen to your stuff and your family?
If you’re like many people who have not done any estate planning, a judge will likely come up with answers to those questions following a court proceeding that could be both long and expensive.
If you have minor children and something happened to you and your spouse, without a legally valid appointment of guardians for the children, a judge would decide where they would live and who would take care of them.
Many parents of young children have life insurance protection in place and therefore believe their “estate planning” is adequate. However, the reality is that if the parents died, without other legal framework being in place, most insurance companies would retain the life insurance proceeds meant for the maintenance and support of the children and would require a judge to appoint a guardian and conservator for the children and their assets before they released the life insurance proceeds. At the top of one of the life insurance beneficiary designation forms I recently reviewed, it states the following in bold text:
We strongly discourage the naming of minor children as Primary Beneficiary. Death proceeds cannot be paid to minor children. A trust or guardianship must be established for a minor to receive the claim proceeds.
In other words, just having life insurance without more estate planning vehicles likely will not be adequate and proper protection for young children.
Estate planning is not just planning for death. I’ve never visited with a mortician as part of my work as an estate planning attorney. Despite what you may have heard or believed, estate planning is not just something old folks worry about just prior to death. It’s about life planning issues, and most adults are in situations in which they should give these matters serious consideration.