Many people equate estate planning with older people who have more assets and more to protect. However, that doesn’t mean younger people should ignore the benefits of estate planning. According to Caring.com, only 34% of adults ages 35 to 44 have a will and 18% of adults ages 18 to 34 have one.
DeAnna Alger, tax supervisor at Zinner & Co; and Todd Resnick, co-founder and president of One Seven, both in Beachwood, said it’s a smart idea for younger generations to look into estate planning.
“An estate plan is not just for older people or the ultra-wealthy,” Resnick said. “Many younger adults have successes financially, as well as ongoing changes personally with marriage and their families. One of the first things a young married couple should do is discuss their vision and goals for their legal affairs should something happen to one of them or within their family.”
Alger said estate plans introduce certainty into an otherwise uncertain life.
“There are many reasons to start early – one of which is you never know what is going to happen and you want to make sure all your assets are in place,” she said. “This could include any debts you have, like student loans.”
When compiling an estate plan, there are a few things younger people should remember.
“One of the main things people should be doing is checking and making sure all their accounts have a beneficiary set up,” Alger explained. “This includes life insurance, retirement, and checking and savings accounts. Make sure all of those accounts have named beneficiaries and that they are updated for life and family changes.”
Alger added estate plans are important for everyone, but maybe more important for those with more assets. Someone fresh out of college might not find it as important as someone who is just married with a new baby, she said.
But, Resnick said there are different “complexities” depending on each situation, both professionally and personally.
“Many at a young age will be fine with a will and a health care power of attorney,” he explained. “As marriage happens, it is also a time when people have more complexity professionally, like starting a business, becoming leaders at companies and needing more complex and protective plans.”
Though younger generations are known to be independent and seek to meet all of their needs online, Resnick said estate plans should be treated differently.
“While I have never tried online tools or ‘do-it-yourself’ strategies, I think professional help can make it an easier and more thorough process,” he stated.
Alger said, “Anyone can go online and set up a free will or trust, but obviously you want to meet with a professional depending on the level of assets you have. This makes sure everything happens the way you want in case something happens to you. The free programs online won’t be able to encompass everything for everyone.”
Estate planning should be approached with a goal in mind, Resnick said.
“Start slowly and speak with one or two trusted people,” he suggested. “Not everyone in this world needs a trust or complex plan, so getting a couple of opinions can help you effectively build a plan that suits you and your goals. When you combine this with a thoughtful approach to insurance, risk management and investing, many will be in a great place in a short time.”
Alger noted, “Start as early as you can and set the groundwork for more complex planning that will come in the future. Laying the foundation now will mean less heartache and hassle for those left behind after you pass away.”