Among the priorities of millennials, estate planning may not be at the top of their “to-do lists.” Many are at the twilight of their educational pursuits. Others are at the dawn of their careers. Some start families. Others are looking to buy homes or travel the world.
Many people put off estate planning for years. There always seems to be a good reason to put it off. At first some people think they are too young to have an estate plan or that they do not have enough assets. In later years, time is limited with new jobs, young children and household duties. Before we know it, we are in our 40s and 50s and still lacking an estate plan. At this point our children may be into their adulthood and the need for an estate plan once again seems unnecessary, but is it?
The goal of a comprehensive estate plan should be to properly allocate your assets in such a manner as to allow distribution to your heirs according to your wishes. One component is wealth preservation. This element works to prevent unforeseen or inadvertent tax burdens from eroding a decedent's estate.
Losing a loved one can be enormously upsetting. People often feel lost and grief-stricken, particularly if the death was sudden or unexpected. In these situations, loved ones can wind up at odds over what should happen to the person’s estate. This can happen even if there is a will in place, as there may be reason to question the accuracy and/or validity of the will.
Estate planning can be especially problematic for some families who are dealing with a child suffering from an addiction. Whether due to alcohol or drugs, the presence of an individual with an addiction can make the reality of estate planning even more off-putting for many people. They know they will have to confront a situation they may prefer to avoid. They may be worried that a child suffering from an addiction could waste assets, or worse, spend them on feeding their habit.
One of the more challenging areas of estate planning law today concerns digital assets. Many people have music libraries that consist of thousands of songs. Some may own electronic versions of books, used on devices like the Kindle or Nook. While these technologies are relatively new, these items, along with iTunes' catalogs are likely to grow over time and may at some point replace many tangible assets like books, CDs and records.
Reverse mortgages sometimes may be necessary. They can provide an additional source of funds for individuals who have equity in their home but have insufficient income to cover the costs of a healthcare emergency or some other shortfall.
When a person dies with an estate plan that was well-drafted and kept up to date, the results are often uneventful and as the decedent wished. The property is transferred or if it is in a trust, the successor trustee takes over and handles the particulars of the operation of the trust. This all should proceed smoothly, allowing the family the time to grieve and minimizing the stress of dealing with the intricacies of probate law.
The incoming Trump administration has a made a goal of ending the federal estate tax. You may think this simplifies estate planning or makes it unnecessary. In reality, only about 2 percent of estates are ever subject to the federal estate tax, so for most individuals, the presence of that tax has never been much of a concern.
Estate planning is often looked at as being somewhat dull. Wills, trusts, powers of attorney can all seem unexciting. For one, much of these instruments are concerned with the future. Some, like a will, only becomes effective upon one's death and no one really wants to spend much time thinking on that subject. It also can be changed at any time by an individual and may seem both fixed and transitory. But an estate plan should not be seen as a stack of static documents gathering dust in an attorney's office.