If estate planners had a dime for every time they heard someone under the age of 25 complain that they don't need estate planning, those planners would have a lot of dimes. Most young people do not realize that their life changes in a legal sense when they reach 18 years old. At that point, the courts might have to make decisions for a teenager instead of their parents if that teenager becomes incapacitated. Let's look at some of the common estate planning problems young people have and address them one at a time.
Everyone, at any age, has assets. Your collection of baseball cards you have had since you were a kid or the guitar you bought with your own money from part-time jobs when you were 16 are assets. If you are over the age of 18 and do not have an estate set up, then the courts will decide where all of those assets go. If you want your best friend to have your baseball card collection and your parents find out the collection is valuable, you would have just set off a major legal battle simply because you did not think you had any assets.
A tool commonly used by estate planners to help people plan for their family's needs after they are gone is life insurance. If you were to pass away at age 24, who would pay for your funeral? When you were a teenager, did you volunteer your time to a church or charity group that you wanted to leave something to when you pass away? Instead of waiting until you are much older to plan for things like that, it is best to get started right away.
If something were to happen to you and you could not speak for yourself, who would make decisions for you? Your parents love you, but are they the best people to decide what happens to your health or assets if you become incapacitated? Without estate planning, you have no power of attorney or health proxy in place to give explicit instructions if something were to happen to you. Instead of leaving your future decisions to chance, you should put an estate together and put your wishes in writing.
An estate is an arrangement that looks after your health and assets if something should happen to you. Right now, that may not seem important. But the truth is that once you turn 18, you become responsible for yourself as an adult and you will need to have estate information in place to protect your interests. As you get older, your estate can be updated to include the people and possessions that enter into your life. Instead of having no plan in place, you will always have a legal structure in place to look after your wishes if something were to happen to you.
Parents should introduce their teenagers to estate planners to get the process started. Once a teen turns 18 years old, the law looks at that teen as an adult. Without an estate in place, that young adult could leave a huge legal mess behind if something were to happen to them.
