One reason why people do not draft an estate plan—most people do not have a plan in place at this time—is that they think they are simply too young. They may know that it will be important to draft an estate plan before they pass away, but they are only in their 30s or 40s, so they assume that they have decades before they need to take this step.
But this is a major risk to take. For one thing, it is always possible that someone could pass away unexpectedly, such as in a car accident. There is no guarantee that they can wait until they are in their 60s or 70s to draft an estate plan. But that is not the only reason why it is a good idea at a younger age.
Making medical decisions
For one thing, estate planning goes far beyond just transferring assets to children or grandchildren. A person could use it to make future medical decisions, such as setting up a living will or establishing a medical power of attorney. This can be beneficial to them at any age if they become incapacitated.
Making plans for children
Another thing that younger people have to remember is that they may be parents themselves. Once they have a child, they can use the estate plan to take certain steps to secure that child’s future. One example is setting up a guardianship so that someone is legally designated to take care of the child if they cannot. Another example is establishing a trust fund because the child likely will not be able to inherit assets until they turn 18—but financial assets can be held for them in a trust.
These are just a few of the reasons why making an estate plan is important, so it is crucial for people to understand what steps to take.