When Should You Start An Estate Plan?

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When should a person or couple start their own estate plan?

Right now, no matter your age.

Estate Planning for Minors and Younger Adults

The list of things that should go into the estate plan is rather short for minors and younger adults just getting started. However, even for teenagers, there are some things that are important in their own right. Every plan that we consult on helps prepare young adults for the future and increases their level of responsibility.

The old souls are the easiest to work with among the youth—they love planning. The hardest ones to reach are the busy ones. They feel that they simply don’t have the time. They are usually correct, but that doesn’t mean they cannot start estate planning. It just means they need to delegate an act that they are generally getting good at or are experts at.

Once we explain that not having an estate plan will cost thousands to millions of dollars, depending on the size of the estate, people act. Failing to plan is planning to fail. It is just as accurate in the estate planning context as anywhere else. Aside from the loss of assets, an estate that you do not plan will be planned by someone else. That means either a judge or attorneys will make critical decisions if you do not make them in a timely fashion. The assets that you have worked hard to accrue are going to go the way state lawmakers dictate. We haven’t found many people who thought it was a good idea for a chunk of their hard-earned funds to be siphoned off to pay people whom they didn’t select to make decisions that they might not have approved of. The best estate planning attorney is the one you consult before your plan, will or trust is challenged.

What is Estate Planning?

To answer this question, we will provide a simple answer and a technical answer. Simply, estate planning is the process of protecting and growing your estate while directing where the assets of the estate will go during your life and after. The technical answer is that estate planning is a mesh of documents and legal instruments, sometimes quite simple, that will regulate the assets which are placed under their control. Everyone has heard of wills and trusts. Here is a list of a few of the documents and instruments that you might call into service that you may not have heard of: advanced directives, durable power of attorney, living will, testamentary trust, guardianship designations, beneficiary designations, irrevocable trust, disposition of final remains, Totten trust, AB trusts, QTIP trusts, etc.

Who Needs Estate Planning?

Technically, not everyone NEEDS estate planning. There are people who are content to die and leave the distribution of their earthly belongings to the whimsy of the legal system. On the other end of the spectrum, there are people who are absolutely dependent on estate planning. For example, in certain special needs cases, beneficiaries may be reliant on distributions that fund health care expenditures, including medications, therapists, treatments, and assisted living facilities or workers. However, almost everyone can benefit from estate planning.

Aside from the direct benefits, many of our young clients find that the focus on creating a will or trust increases their overall discipline and earning capacity. The more assets you have, the more you have to lose, and the more critical estate planning becomes. If you are close to or in retirement, planning is highly important because the failure of your assets to produce as expected, or diminishing assets, could force you to delay or come out of retirement.

Parents and Estate Planning

Having kids, as you may know, changes everything. For couples that are interested in having children, we strongly encourage estate planning before pregnancy. You will be too busy with other pre- and postnatal activities to accomplish estate planning effectively. You may not expect changes to your estate and your status, but change happens, and often unexpectedly, and to those who are least prepared. Murphy’s Law is in full effect in estate planning law!

One specific application of estate planning that deserves special mention is the preservation of assets. This can include protection against tax liability and against lawsuits. For middle-class and high-net-worth individuals, it is often worth setting up these protections through a will and trust. We relish preventing the loss of your assets.

What Documents are Needed for Starting An Estate Plan?

As you might suspect, the answer to this question varies widely with the size and complexity of your estate. More importantly, it depends on the size and complexity of the goals that you have for the estate. Our office has constructed plans for every size of estate, and we have the ability to quickly and cost-effectively create yours.

When Do I Update My Estate Plan?

Similar to the answer above, probably right now! As soon as you have a change in assets or property that you cherish, it’s time to update your estate plan. Or update when dependents shift or change. We assume that you cherish them—and in the case that you don’t, we can write up a plan that disinherits them. We encourage you to discuss and have the update ready to go if you expect the above changes or believe that they are possible.

Do I Need an Estate Planning Attorney to Start an Estate Plan?

You can opt-out if you have a small, simple estate with no real estate, no existing conflicts among heirs over the estate and can administer the legal instruments and documents effectively on your own. Regardless of small or large estates, having a qualified attorney can guide you through the planning process and eliminate the stress.

We help clients throughout California. In addition, we have helped thousands of families successfully set and reach their estate planning goals.

David R. Schneider specializes in estate planning, bankruptcy, probate work, and business services. David is known for his personal and client-oriented services. Visit DRS Law.