Estate Planning Myth: “I’m too young to worry about this stuff…”

June 7, 2013 - Posted by: admin - In category:

taxes - No Responses

Its very common for “young” people, i.e. individuals under the age of 65, to wrongly conclude that they are “too young” to concern themselves with estate planning matters.  This idea of being too young for estate planning is somewhat akin to being too young to concern oneself with proper health habits or proper dental care.

To quote an article from FoxBusiness.com:

The last thing on the minds of young adults heading off to college is drafting a health care proxy and power of attorney. Once they emerge freshly educated four years later, visions of wills and trusts are also unlikely to be on their radar. After all, who thinks about ticking off items on an estate planning checklist while they’re still in the throes of figuring out how they’re going to pay off student loans?

Not many people do, but there are a few bare-bones estate planning basics that even the college freshman could benefit from and that are nearly necessities for singles in their 20s and 30s.

Read more: http://www.foxbusiness.com/personal-finance/2013/05/03/youre-never-too-young-to-think-about-your-estate/#ixzz2VXzrAmwp

The article also addresses the importance of everyone having a HIPAA authorization and a Health Care Directive.  Everyone needs to have these documents.  Our firm includes these documents for every client we work with, free of charge.  In addition to the healthcare related documents, people with young or special needs children have an urgent need for proper estate planning assistance.  Otherwise, who will care for such children in the event something happens to the parents? Further, what responsible parent is willing to leave the care of their children to some stranger in the government and court system?

It would be wise for all parents of young children to schedule a visit with a competent estate planning attorney and also a trusted financial adviser in order to formulate an estate plan, which includes a comprehensive financial plan, which would appoint guardians and safeguard assets for children if parents were not around. Ensuring adequate life insurance coverage is certainly part of this overall strategy.

Putting together this type of protective plan does cost money and it takes some time and effort, but once its completed, parents can then have peace of mind, knowing that the future of their children is safe and secure.  With regard to the cost aspect–what worthwhile endeavor in life is without some cost these days, particularly when it comes to doing things to protect you and your family?  It is also worthwhile to compare the “relative” costs–in other words, when you are evaluating the cost to engage qualified professionals to help you with such important matters, consider such costs in the context of your family and their well-being.  Also keep in mind the relation between such costs of professional help with the overall value of your property.

I mention this last point because I am often in discussions with people here in Utah who have hundreds and hundreds and hundreds of thousands of dollars worth of assets (sometimes multiple millions in assets) who at the same time want to bargain and dicker with professionals and others to get the “cheapest option” when it comes to engaging professional who will perform the specialized work of helping them to protect and manage such assets over the long-term.  This type of behavior often reminds me of the phrase “stepping over dollars to pick up pennies”.

In summary, please don’t fall for the fallacy that wise financial planning and estate planning (which includes the financial planning) is reserved and only applicable for golden-aged individuals.  Nothing could be further from the truth.  Just because something is commonly believed, that does not make it true. Remember that for many centuries the prevailing wisdom in the world was that the earth was flat…:)

Updated November 10, 2016

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