Estate planning is not just for senior citizens or those preparing for retirement. Three reasons even young families need an estate plan include:
- Control. If you do not put together an estate plan, the state will. State law will govern the distribution of assets for estates that have no plan. In many cases, this means assets will go to a spouse if a spouse is present. If not, the assets generally go to parents or siblings. You can circumvent this system by drafting an estate plan.
- Protection. The most primal need in parenting is to protect one’s children. Parents can extend this protection beyond their own lifetime by designating a trusted individual(s) as a guardian. Without this designation, the state will determine who raises your children.
- Inheritance. A second consideration involving children involves how the children will inherit their wealth. A failure to provide instructions on the distribution of assets could result in the transfer of assets to children once they are of legal age. For those with significant assets, that means children can come into great wealth at a time when they do not have the mental capacity to handle the funds wisely. Parents can reduce this risk through the use of one or more trusts. A trust can provide for smaller payments throughout the child’s lifetime and, depending on the language of the trust, potentially shield the assets from creditors.
These are just three benefits to an estate plan. Contact an attorney to discuss additional benefits and the many legal tools that can be used to craft an estate plan that meets your needs.