Are you are a young professional? Do you have young children or are you expecting them? If so, congratulations, now is the perfect time to create your first basic estate plan.
Young professionals often delay drafting an estate plan because they are in the early accumulation stages of their career. But this does not alleviate the need for an estate plan. For example, the compulsion behind creating my family’s estate plan was the impending birth of our daughter. Our greatest concern was our daughter’s guardian if my husband and I should die unexpectedly. This question and many more were answered in our estate plan.
A basic estate plan for your family may contain a will, durable power of attorney, living will, health care power of attorney, and a testamentary trust. Among other things, the will names your childrens' guardian if both parents die prematurely. Without a will, children receive a court-appointed guardian (one you may or may not have chosen). If you and your spouse haven’t discussed guardianship, now is an excellent time to start.
A carefully drafted will also provides financially for your children if both parents die. For example, without a will, if my husband and I were to die tomorrow, our son owns all insurance proceeds and any other assets. Although she is a minor now, she will receive all funds outright at nineteen, the age of majority in Nebraska. However; a testamentary trust created upon our death for our children’s benefit is different. This extremely flexible trust provides for asset investment, while often paying for life’s necessities such as food, medical care, and housing. Our children will then receive the balance of the trust at an arbitrary age we choose. Many choose age 25 or 30 to encourage their children’s success in society before receiving a trust windfall.
The other pieces of a good estate plan include a durable power of attorney (for financial decisions), a healthcare power of attorney (someone who makes your medical decisions when you can’t), and possibly a living will (which directs physicians with the amount of extraordinary medical care to afford you when incapacitated). Pre-planning alleviates the need for your family to make heart-wrenching decisions during difficult times.
There are other factors a professional estate planning attorney will help you consider. They will help you choose your Personal Representative and Trustee. This process can be completed painlessly with your competent attorney’s assistance. So please, create your estate plan now. Your family will be glad you did.