According to 2019 survey by Caring.com, 79% of millennials do not have an estate plan in place. However, estate planning is not just for the wealthy or elderly. Because life often takes unexpected turns, estate planning is crucial regardless of age or financial status. In fact, the negative consequences of dying without an estate plan in place are often compounded in the case of a young adult. If you are under 40, here are a few reasons why you should make estate planning a priority:
To Control Who Receives Your Assets
Without an estate plan, you have no control over who receives your property at your death. If you die without a will, state intestacy laws dictate who will receive your assets, and the recipients may not be who you thought they would be—or would want them to be. Intestacy laws provide a one-size-fits-all approach to asset distribution and generally assume a traditional family situation.
In Virginia, if you were to die without a will, known as dying intestate, your property would generally pass to your spouse or children. If you are married but have children from a prior relationship, the majority of your property would pass to your children, rather than to your spouse. If you were to die intestate, unmarried, and without children, your property would pass to your next closest relatives according to the law. These default rules are not in line with how many people would choose to leave their property. Executing a will allows you to name multiple beneficiaries, give certain assets to certain beneficiaries, and name charities or people that would otherwise not inherit from you (such as an unmarried partner, friends, or more distant relatives like nieces and nephews), and divide your assets among them as you see fit.
To Ensure Smooth Transfer of Assets
Estate planning also ensures that your beneficiaries receive your assets how and when you want them to. Property passing by intestacy or under a will goes through probate, which can be a time-consuming and expensive proposition. With some planning, other methods of transferring property can be utilized to avoid or reduce the probate process. This can be important especially for young families, to ensure assets are not tied up in probate and can be immediately accessed following an unexpected death. Additionally, by executing a will, you can ensure your named beneficiaries receive your assets when you want them to. You could, for example, leave money to your minor children and stipulate that it be held in trust for them by someone you appoint until your children reach whatever age you deem appropriate.
To Appoint Guardians for Minor Children
Have you ever worried about what would happen to your young children if something unexpected were to happen to you? Under Virginia law, the parents of a minor child are typically the joint natural guardians of the child with equal legal powers and rights with respect to the child. In most situations, upon the death of either parent, the survivor is the guardian of the child. If you are a parent, you can appoint a guardian for your minor children in your will, designating the person who will have custody of your minor children following the death of both parents. Without a will naming guardians in place, the court would decide who to appoint as guardians for your minor children, without any input from you. Appointing guardians for minor children is perhaps the most important reason why individuals with young families should not delay in executing a will.
To Provide for Pets
While pets are often considered to be part of the family, they are considered property under the law. Without an estate plan in place, you have no control over who will end up with your four-legged friends. Sometimes the default recipients are unable to take care of them or find them a suitable home, so many pets end up in shelters following their owner’s death. With some planning, you can ensure your pets end up with someone you trust to give them a loving home, and even designate funds to provide for their care.
For these reasons and more, estate planning is critical at all stages of life. While death is a certainty, its timing is not. Drafting a will and creating an estate plan may seem like an unnecessary exercise for those who feel their lives are just beginning, but the failure to do so can sometimes be more detrimental in the case of a young adult than in the case of a retiree. If you have a young family you are actively providing for, you should create an estate plan to ensure your assets get to those who need them most as efficiently as possible, and ensure your minor children are protected and provided for in the case of your untimely death. If you are like many other millennials and do not yet have a spouse or children, an estate plan allows you to provide for individuals, organizations, and even pets that would otherwise have no rights to your property. In either case, estate planning is critical and ensures that if the unthinkable happens, you have taken care of the people and things that are most important to you.