You may have heard several contradictory opinions about who needs an estate plan. Whether you think it’s for the wealthy or those nearing retirement, this article addresses who actually needs to start estate planning.
From distributing assets to reducing taxes, estate planning is more than just a legal process—it’s a way to secure peace of mind for the future. In this blog, we’ll explore why estate planning is necessary for individuals at every stage of life and how it safeguards what matters most.
2 Myths You Might’ve Heard About Who Needs Estate Planning:
1. Estate planning is only for the wealthy.
One of the most common misconceptions about estate planning is that estate planning is only for those who are wealthy—this couldn’t be further from the truth. Estate planning is about much more than managing your wealth; it’s about planning ahead to ensure your wishes are carried out, your loved ones are protected, and you’re prepared for the unexpected. No matter the size of your estate, preparing for the future delivers peace of mind for yourself and your loved ones.
Estate planning helps you avoid probate, appoint people for important end-of-life decisions on your behalf, and eliminate conflict among family members after you’ve passed. No matter how much wealth you’ve generated, estate planning is essential to safeguarding you and your family’s future.
2. Estate planning is only for older people.
This is another myth about estate planning that can cause difficulty once you reach a certain age. Estate planning is essential to anyone’s life and actually prevents problems and challenges as you grow older. It’s recommended to start planning ahead as soon as possible, whether you’re fresh out of college or middle-aged. Why is estate planning not only for older adults? Preparing in advance ensures your assets are protected and managed according to your wishes, your loved ones are cared for, and you have peace of mind throughout your lifetime. It also makes sure that if something were to happen to you, there would be appointed trusted individuals who know your wishes regarding medical decisions.
Knowing where your assets will go and how your family will be cared for once you’re gone, you’ll thoroughly enjoy life without the stress of the unknown or unexpected looming in the back of your mind. Start estate planning while young to ensure you leave the right legacy behind.
Who Needs Estate Planning? The Answer May Surprise You
To put it simply, estate planning is for everyone. Whether young or old, preparing for your future is a necessary step. Regardless of income level or family size, you and your loved ones will significantly benefit from an estate plan.
If you fall into any of these categories, you need to start creating an estate plan:
- Parents with Minor Children: Ensure your children are cared for by appointing a guardian and setting up trusts to manage inheritance until they reach a responsible age.
- Individuals with Large Assets: Protect more considerable assets from excessive taxation and ensure they’re distributed according to your wishes.
- Business Owners: Provide a succession plan to maintain business continuity and decide who will inherit or manage the business once you’re gone.
- Married Couples: Decide how joint assets will be distributed and set up provisions for blended families or stepchildren.
- Single People: Even if you’re single, having an estate plan will allow you to decide who will inherit your assets (especially if you have no immediate family). Additionally, you can designate someone to make healthcare or financial decisions if incapacitated.
- Elderly Individuals: While estate planning isn’t only for senior adults, it’s still essential for these individuals. Prepare for incapacity with powers of attorney, advance healthcare directives, and plan for long-term care costs with an estate plan.
- Anyone Without a Will: Avoid the state’s default rules of intestacy, which may not align with your wishes.
Ultimately, anyone who wants control over their assets, decision-making in the event of incapacity, or peace of mind for their loved ones needs to consider estate planning.
Why is Estate Planning Important for Everyone?
If we claim everyone needs estate planning, why do many people avoid it until it’s too late? One reason is that individuals don’t understand how important it truly is. Whether you’ve started to prepare already or are still on the fence about starting, here’s how estate planning can benefit you, no matter what stage of life you’re in:
1. An estate plan eliminates family conflicts.
When you pass away or are nearing the end of your life, the last thing you want to do is cause a mess among those you care about most. Without a clear estate plan, siblings can fight over how much money or assets they deserve and how you should be cared for if you’re incapacitated. While some conflicts disintegrate, others transfer to the court, with family members and close friends fighting against one another.
Prevent ugly family conflicts by creating an estate plan as early as possible. In an estate plan, you can clearly outline who gets money, possessions, and other valuables while explaining how you’d like to be cared for if you can’t make decisions. It can also help with arrangements for a child with health issues or to set up a trust for someone who might be better off not inheriting a large sum. To put it in perspective, an estate plan gives you complete control over how you’d like to leave your family and estate behind. Without one, you risk causing division among family members that could end in lengthy and costly court hearings.
2. An estate plan protects your children.
It’s saddening to think about dying young and leaving small children behind, but it’s best to prepare for anything to protect what matters most. Estate planning ensures your younger children will be cared for in a way that you approve of and by people you trust to love them as you would. In an estate plan, you can name your children’s guardians in the event that both parents die before they’re 18, but without a will that names this, the court will take control and decide who raises your children if you pass away.
3. An estate plan keeps beneficiaries safe.
At one time, estate planning was only considered necessary for the wealthy—but it’s not that way anymore. Nowadays, countless middle-class families must prepare for the future, especially if it involves the family’s breadwinners. Assets like shares in the stock market or real estate can be passed to heirs, but only if they are clearly outlined in your estate plan. Without this documentation, these assets may not be distributed as intended, potentially causing legal complications or disputes among loved ones. If you’re leaving a second home to someone, don’t let the state decide—an estate plan ensures the court won’t determine who inherits what matters most to you.
One of the main benefits and factors of estate planning is having complete control over designating heirs for your assets. Without a clear plan, the court will take over, and it can be a lengthy, messy, and expensive process for those you leave behind.
4. An estate plan reduces taxes.
Many people don’t realize that strategic planning can minimize estate and inheritance taxes, allowing more of your assets to go to your loved ones instead of being lost to government fees. Proper tools like trusts and gifting strategies can significantly lower the tax burden on your estate.
Estate planning involves protecting loved ones from the Internal Revenue Service (IRS). Proper planning involves transferring assets to beneficiaries with special attention to creating the most minor possible tax burden for them. Estate planning can go a long way in reducing much or even all federal and state estate taxes and state inheritance taxes for your heirs. Several strategies to minimize taxes for beneficiaries include creating an Irrevocable Life Insurance Trust (ILIT) or practicing annual gifting.
Start Estate Planning Today With Kelly Cardon Law
In conclusion, who needs estate planning? The answer is simple: you do. Whether young or elderly, wealthy or not, preparing for the inevitable is a wise investment in your legacy and protecting what matters most.
If you’d like to start estate planning, working with an experienced estate planning attorney is vital to outline your wishes appropriately. At Kelly Cardon Law, we help our clients draft trusts, establish wills, and ensure their loved ones’ futures are protected instead of in the hands of the state. Located in Northern Utah, we’re dedicated to listening to your preferences, outlining them clearly in legally binding documents, and helping you prepare for the future before it’s too late. Contact our team to benefit from our expertise and create an estate plan to safeguard your and your family’s future.