If you are a young professional or a parent with small children, you may think estate planning is something you’ll get to later, maybe twenty or thirty years down the road. But in reality, there are lots of good reasons for twenty, thirty and forty-year olds to start their estate planning now.
Does your job give you retirement benefits?
Many jobs today offer contributions to a retirement plan as part of the benefit package. If this is true in your case, you may have inadvertently started your estate plan without even knowing it. Typically, while explaining the details of your retirement plan, an HR representative will ask you to name a beneficiary, a person who would receive the benefits of the plan if you were no longer living.
Choosing a beneficiary is a very important decision. You may want to name your spouse or significant other as beneficiary. Otherwise, you could choose your brother or sister, parents, or one of your friends. But if you consider naming a minor, like your own child or a niece or nephew, you’re creating bit of a problem.
Children under 18 cannot inherit money directly from a retirement plan without the Court getting involved. Without further estate planning to manage this inheritance, the child’s guardian would have to petition to be named custodian of the inherited account. This process incurs court fees and the custodian also has a right to be compensated, which depletes the money you worked so hard to create.
Do you own a home in California?
If you own property, you need to make an estate plan. In California, a person’s home is often his or her largest investment. If your home has a fair market value of more than $50,000 (meaning what the home would sell for, regardless of debt), your loved ones would need to go to Court to inherit the house, unless you make an estate plan. The California Probate Court process costs on average 5% of the total value of the estate, is totally public, and delays distribution to your heirs for 12-16 months.
Do you have children?
If you have minor children at home, planning is a must. If you could no longer care for your children and had no estate plan in place, the Court would decide who should raise them and appoint a fiduciary to manage their inheritance, for a fee. Then, when they turn 18, the remaining inheritance would be distributed to them outright, without any guidance or supervision. You will need to legally name both temporary and permanent guardians and properly structure your children’s inheritance to best provide for them in a family emergency and beyond.
Do you have pets?
California is one of the most pet-friendly states in the country. For many of us, our “fur babies” ARE family, a joyful part of our everyday lives. And just like family, their future care is an important responsibility. Tragically, pets who lose their owners will likely be taken to a public shelter, where the euthanasia rates are staggeringly high. Other family members may not be willing or able to take in the pets, due to personal financial constraints, allergies, or incompatible lifestyles.
Your personalized LifeLadder Estate Plan will address all of your concerns and avoid the undesirable outcomes described above. To get started, watch this Webinar and take the first step towards protecting your family’s future.
