Estate plans are typically created by older people. That’s because they usually have more assets to protect.
But, according to Steve Gariepy, partner and chair of the estate planning group at Hahn Loeser & Parks LLP in Cleveland; Dan Goldfarb, a wealth adviser at Planned Financial Services in Beachwood; and Kimon P. Karas, principal at McCarthy, Lebit, Crystal & Liffman Co., LPA in Cleveland, young adults should also consider creating estate plans.
“While we hope that young adults live long and healthy lives, the reality is that some young adults die prematurely without an executed will in place, resulting in their assets transferring following their state’s intestacy laws,” Goldfarb said. “A properly executed will permits young adults to express their wishes for how their probate assets will transfer to people or organizations after they die.”
Gariepy explained the misconception that estate planning is for the elderly is false because young people also have things they would like to protect. For young families, that could be children, he said.
“If there is a child, that child is going to be quite young, so it is important to name a guardian that will take care of the child,” he said. “That allows them to choose who will be the guardian instead of leaving it up to probate court.”
Karas said even 18-year-olds should have minimal estate planning, as they are the age the government considers an adult.
“So, at the very minimum, they should have health care directives and financial power of attorney,” he explained. “If someone needs to make a medical decision for them or someone needs to access medical information, you can’t do so unless you’re authorized. Young people pre-marriage, they do have assets. As minor as they may be, it’s just a hassle if there is (no estate plan) left behind.”
There are also other assets that young adults may not consider important enough to protect, or even think about. But, the professionals said anything with monetary or sentimental value is worth planning for.
“Regardless of the value of their investable assets, young adults may have special situations that support the need to have wills in place,” Goldfarb said. “For example, some young adults may wish to include provisions to provide money for a family member or a friend to care for their pet upon their deaths.”
Goldfarb added young adults should think about their digital property – including documents, photos, work products, passwords and accounts. These items could be difficult to access or lost without an estate plan, he said.
Karas said, “Even in a young person’s situation, there may be family heirlooms like grandma’s wedding ring. If there is no will or they don’t think about those things, who knows where the item could go.”
But regardless of their assets or lack thereof, early estate planning is simply a good measure, the professionals said.
“It is the beginning of a process of education because the will is an estate planning building block,” Gariepy noted. “It is the first exposure for many to what is involved in estate planning, like a will, probate court, an executor, etc. As time goes on, there will be more of a need to consider a trust arrangement and other building blocks. So, having an early start of why it is important, it’ll make a big difference as time goes on.”
Karas explained estate planning is an overall process and should be revisited. So, early education can help keep it at the forefront of the mind.
“It’s not rocket science and they’re not going in for surgery. It’s a seamless process, but needs to be done,” he said. “So once you do it and sign it, then it is something you’re thinking and know about.”
Though early planning is helpful for one’s estate, Goldfarb said the benefits don’t end there.
“As young adults understand the process of estate settlement, they will be better prepared if they are appointed to serve as executor for another estate,” he said. “The young adults can achieve peace of mind that they have taken the necessary steps to ensure an orderly disposition of their assets when they die.”
Publisher’s note: Dan Goldfarb is a member of the Cleveland Jewish News Foundation Board of Directors