I’m Too Young’ for Estate Planning: Overcoming Misconceptions About Age and Estate Planning

Atty. James Jones: [00:00:00] Most people between the ages of 18 and 30 don’t think they need an estate plan. They often might not have many assets. They’re students, they’re starting out in their career and in life, but that mindset’s not right. While estate planning’s often associated with the later stages of life, it may be even more important for younger people to consider.

Most people between the ages of 18 and 30 are not married. They’re looking for independence, they’re more transitory than their older counterparts. They might bank here and there and have a 401k here and there because they’ve moved and they’ve changed jobs and their lives are a little bit more spread out. I guess we could say in that age and they’re not quite as established in one community, so most aspects of their finances and estates are less established, therefore, sometimes they’re more complicated to deal with.

Narrator: You are listening to the legacy talk podcast hosted by James A. Jones, attorney at law and founder of sound legacy law, PLLC in Tacoma. Attorney [00:01:00] Jones is here to talk about how to best protect your family assets and well, pulling stories from his more than 20 years of helping families and business owners protect their assets, create their estate plans, preserve their wealth and plan for the future.

Nobody wants to think about estate planning, but life has a way of sneaking up on you. And at any moment, something unexpected could happen that will leave you regretting not having acted sooner. So join attorney James A. Jones in the Legacy Talk Podcast and together learn how to plan for your future today and have peace of mind tomorrow.

Atty. James Jones: Welcome to Legacy Talk. I’m your host, James Jones. I’m an estate planning and probate attorney in Tacoma, Washington. I’ve been practicing over 20 years, and my main practice areas include estate planning, probate, and estate administration. On a Legacy Talk, we discuss topics surrounding families and estates.

Estate planning is often [00:02:00] a confusing and complicated topic, but my goal with this podcast is to make it understandable and accessible to the people who need it. So if this is something that interests you, I appreciate it if you click the subscribe button and like this episode so that you can follow along with us as we break down the barriers to estate planning.

I’m excited to get to today’s topic. Today’s topic is I’m Too Young For Estate Planning, Overcoming Misconceptions About Age And Estate Planning. We’re discussing this today so that you can know when it’s time to put your estate plan in order.

So on today’s show we’re talking about, I’m too young for estate planning, overcoming the misconceptions about age and estate planning.

So let’s get to it. Most people between the ages of 18 and 30 don’t think they need an estate plan. They often might not have many assets. They’re students, they’re starting out in their career and in life, but that mindset’s not right. While estate planning’s often associated with the later stages of life, it may be even more [00:03:00] important for younger people to consider.

Most people between the ages of 18 and 30 are not married. They’re looking for independence, they’re more transitory than their older counterparts. They might bank here and there and have a 401k here and there because they’ve moved and they’ve changed jobs and their lives are a little bit more spread out. I guess we could say in that age and they’re not quite as established in one community, so most aspects of their finances and estates are less established, therefore, sometimes they’re more complicated to deal with.

And so today we’re talking about some of the things to look out for and some of the reasons why younger people should consider estate planning and not put it off as something for the seniors only. Okay?

So we’re gonna talk about 10 things or 10 reasons that younger people, I guess, or these Millennials, I think they’re Millennials. they might be Gen. Wires. I don’t know. I’m not sure, [00:04:00] but they’re younger than me, I know that.

And so we’re gonna talk about 10 or so reasons today, why we should, if we’re that age, younger people 20 years ago or more, I should think about estate planning, it’s not just for the elderly. So estate planning really is a proactive measure, right?

Number one is estate planning is not just for the elderly. Estate planning is a proactive measure that everyone, regardless of age, should do to protect themselves and their families, and their loved ones and their assets, right? They need to avoid the assumption that estate planning can wait until later. Because unexpected events can happen anytime, unfortunately. And there’s many benefits of having an estate planning in place as a younger adult, and we’ll go through more of those here as we go along. The first thing after estate planning is just for adults.

So this is the number two reason to have an estate plan if you’re a young adult. Okay? Accidents [00:05:00] and unintended events, or unexpected events, okay? We need to be prepared for things that might happen to us in life. Accidents happen, people don’t always die according to the natural course, right?

There’s car accidents, there’s sudden illnesses, there’s other adventurous type accidents. Younger people seem to be more adventurous, so maybe they have more accidents, they do some more things that are probably dangerous and unexpected things happen. So we need to be prepared for those events and have a plan in place for what happens if something like that happens to you.

If we don’t have a plan in place during those unexpected events, that often causes confusion and delay and stress for our loved ones and our friends, and this is already a difficult enough time for them. We need to consider the emotional and financial impact of not having something in place in those situations. Okay?

If you were to become incapacitated, if you’re a young adult, if you’re incapacitated, what [00:06:00] happens? What are some things that happen when those unforeseen events take place?

Okay. Number three is protecting our assets. And estate planning is more than just distributing assets when you pass away. It also provides for some protection or can provide protection for assets during our lifetime. And so, things can be set up like trusts and business entities that can protect our assets, especially if you’re starting out in business. If you’re starting out in business or with a business and you’re looking for asset protection, it’s often better to start early rather than waiting till a creditor comes calling or something, right?

A lawsuit comes or something like that happens. It’s better to have that plan in place so that it doesn’t look like you’re rushing or doing something to prevent losing your stuff. Okay?

Number four is planning for incapacity. So, estate planning is not just for what happens when you die. Estate [00:07:00] planning is also designed to make sure that if something happens to you during your lifetime, if you become incapacitated physically or mentally, that someone can help you make decisions.

If you’re injured or have an illness that causes you not to be able to make decisions for yourself. Estate planning should be in place to prevent that. So things like durable powers of attorney, healthcare directives should be in place to name trusted friends or family or loved ones to help make those decisions in those types of situations.

We wanna designate those kinds of trusted individuals to make healthcare or financial decisions when we can’t make them. And this also comes to play, we’ve talked about this before in our episode that talked about durable powers of attorney. If you have kids that are 18 years old, they should have a durable power of attorney, right?

When a child turns 18, they become an adult, right? When they’re 18, they also have the legal capacity to sign documents, execute legal documents. [00:08:00] And so, when a child turns 18, it’s typically best practice to have that child create a durable power of attorney, name their parent or parents as attorneys in fact, or friend or grandma or whoever it is, right?

Guardian, so that if something happens to them, particularly in a healthcare situation, medical situation, that someone’s there, they can talk to the doctors, authorize treatment, and make sure that the care can be provided for that child. Now an adult in those kinds of accidents or medical issue situations. Okay? So that’s something important.

Number five, guardianship for minor children. So 18 to 30 is the age group we’re talking about today. But people that are 18 to 30 can have kids and a lot of the time they do have kids., Maybe they have a brand new kid, right? And so they might not have any assets.

You know, They might be brand new in their career. They might be newly married or not quite married. They have a kid. Maybe the kid is younger [00:09:00] than, 18. So it’s a minor kid in that group, most likely. And so, they should have an estate plan that provides for that child. So we need to provide a guardian to take care of that child if you’re no longer around. Right?

You need to provide a means for that child to inherit assets, and that’s typically through a miner’s trust or something like that’s created in a will. For a minor child to hold assets, okay? On their behalf. So there’s a trustee involved who is in charge of making sure that child is taken care of financially. Okay?

So they pay living expenses, tuition, car payments, maybe books, all those things, right? For that child until that child’s old enough to manage the money themselves, kids under 18 can’t manage their own finances. So we’ve talked about that before, kids can’t manage their own finances under 18, and so they need to have somebody in charge of those funds so that they can use [00:10:00] them or access them. Okay?

And so we wanna make sure, it’s already emotional time for kids if something happens to their parent, let’s make sure that there’s a plan in place for who’s gonna make sure that child is taken care of. And it also makes it clear if there’s family issues, you know who you want to have in charge.

So there’s not as much a possibility for a contest among family members to say, I want that kid, or I want that kid like over grandparents or uncles and aunts, or something like that.

That leads us to the sixth thing, which is avoiding family conflict. And it’s always often a theme of estate planning is if there’s a will, there’s a family.

That’s something that people say and if there’s not a will, especially for a younger person, and there’s lots of people that say, well, I’m sort of in charge of that kid still. Right? So the mom or dad might say, well, I’m still, of course I am kind of in charge of that kid. Or a brother or sister or friend might say, well, I was their confidant, right?

Like, they talked to me about this important stuff, so I really should be in [00:11:00] charge. That could be a big conflict among the family, and so having documents that lay out who’s in charge when you’re gone or who can be in charge of your financial affairs, or who’s in charge of your medical affairs and who’s in charge of your estate, having that stuff laid out in a will durable power of attorney style plan is essential to prevent those family conflicts. Okay?

And avoid confusion and disagreement and all those things. And so when we’re doing that, we wanna have open communication. We talk about this all the time among your family. If you do have an estate plan and put it in place as a younger adult, make sure that whoever you put in charge knows, right?

And if it’s not your parents that you put in charge or your siblings that you put in charge and it’s a friend or partner or something like that, make sure your family, parents, siblings know that’s what you’ve done. Okay?

So that leads us to number eight. I think starting early creates a culture and a habit and a mindset that you will have your estate planning in [00:12:00] place through life, right? Starting early takes advantage of compounding growth, asset protection strategies over time. We talked about that a little bit before. Asset protection is often best done right? We wanna make sure that if you have a business and you wanna make sure you incorporate or create a legal entity to hold that business as an asset protection strategy.

And make sure that business is protected so that your personal assets are protected. And that’s another topic. But asset protection can’t be really done late, like I mentioned earlier. Asset protection needs to be done early, and so starting early with your estate plan sort of encourages you to review this plan over time at certain intervals in life, right?

And create relationships with advisors and attorneys that will allow you to grow into a plan and with your plan, and your plan will grow with you and it just makes it much more seamless and much more part of your life, right?

Which [00:13:00] is really what this estate plan is for, it’s really supposed to be part of an essential aspect of your life, right? We worry about our retirement, right? We worry about our current bills and expenses and our house and stuff like that, our job. But we should also worry about this estate planning stuff, right? At least to the point where we have it in place.

Once you have it in place, as long as you’re monitoring it, you don’t have to worry about it anymore. There’s your peace of mind, right? Peace of mind by planning is what I say.

And that leads us to our next point. Updating your plan is life changes. You know, if you’re a young kid, just outta high school and you’re 18 going off to college, or you have kids that age or grandkids that age.

The only thing they probably need is a durable power of attorney, maybe a healthcare directive. That durable power of attorney will allow someone to make financial medical decisions, which we’ve talked about they get their first job, maybe they get a will, right? Maybe they have a will and a power of attorney.

Probably a healthcare directive, which is more like a living [00:14:00] will that you hear about, that’s for like end of life care. But as they get more assets, that plan changes. Maybe as they marry, they’d have a different kind of will with a minor’s trust. If they have minor kids, as they acquire assets, that will plan can turn into a revocable trust plan to do some tax planning and probate avoidance and all these things, right?

So that plan will grow and evolve as a life. It grows and evolves and so having that structure in place and looking at the horizon for those kinds of things to do or look for like these key indicators, well, when I have a child, I probably, I gotta talk to the lawyer, get my estate planning done right.

When I buy my house, I better talk to the attorney, get my estate planning updated if necessary. So those kinds of things are having those kinds of things on the front of mind. Whereas a regular review, maybe annually or biannually.

And the number 10 thing, the last thing that we’re talking about, I think it’s nine or 10. I, I don’t know. It could be [00:15:00] nine or 10, give or take, you do the math. I guess number 10 is empowering yourself and your loved ones, right? When you take control of your future, when you put affairs in order, it leads to peace of mind, like I said, it leads to not having to worry about the unknown, the uncertainty, right?

It means that you can go skydiving with your friends or rock climbing or mountain climbing with your friends, right? Maybe like long boarding, you go down really long hills or mountain biking or something like that, right? I don’t know, but having a plan in place, right? Having key documents in place, like durable powers of attorney and wills or trusts, allows you to not worry about what might happen because the plan’s in place. Okay?

It’s more about distributing assets, like I said, it’s leaving a legacy, right? Setting the tone and early in life or in adulthood, I guess I should say. It’s important to set that tone for your future children, maybe younger siblings. We’ll see, I learned a lot [00:16:00] from my older siblings, I’m the youngest of five. I learned a ton from them, right?

They’re the ones that help set the culture of my house and I’ve done an episode about that leaving your legacy. But through my parents and my older siblings, they left a significant culture and legacy for me to follow. Right? And that can be something that you can do as a young adult as well, or your children can do.

And so really when you think about it, estate planning is more an act of love and responsibility to those who you love and for whom you’re responsible. And it inspires them, right? It can inspire them to create a legacy down the road. It is good to do, okay?

So those 10 things, nine to 10 things are important to consider. Okay?

So now let’s talk about some examples. This comes up a lot and it’s come up a lot lately in my office and it comes up, I’ve done this for twenty-one years, and so we’ve had a lot of cases for younger people that should have had estate plans and didn’t. Okay? And some things that could happen. Okay?

The [00:17:00] first story I have here is a couple. Okay? It’s about a couple, they were together for a long time, young thirties, not married. Okay? The partner got cancer and had a young child, partner was diagnosed with cancer and she had terminal cancer. Okay? And so they got married right before she passed away, so that they’d have some marital rights, but they didn’t get anything done with the estate planning. They didn’t do it, they waited too long, it didn’t happen. Okay? They had a minor child, like I mentioned, the estate plan was not in place.

Thankfully, they got married, so there was some spousal rights. So the husband of inherited everything via intestacy, which means the laws that the state puts in place to determine where things go for people that don’t have wills. And so the husband received everything that was community property and which may was pretty much everything.

And the problem in this case though, was that there was other assets that were beneficiary designated assets. And [00:18:00] one thing that we don’t consider, and I didn’t put on the list, but we should have, is that part of estate planning is making sure our beneficiaries are correct. In this case that I’m talking about here, the decedent’s sister was named as beneficiary on her life insurance.

And on her retirement plan, because they weren’t married and she was young and she didn’t change it, right? She named her sister as beneficiary and that’s it. Right? And so the sister, of course doesn’t want that money and wants to make sure that the her niece gets that money, right? The minor child gets that money.

So the probate process to make that happen, which is the process to administer an estate. It is much more complicated than it would’ve been had there been a will in place, or had those beneficiary designations been updated. So we wanna make sure that, you know, even a small part of estate planning, especially for a younger adult, is, you know, they’ve got a bank account.

You can have a payable on death. Transfer on death designation on a bank [00:19:00] account. If there’s life insurance, you can have a beneficiary. Of course, make sure that those are up to date and who you want. If you have a 401k because you’re working a job, those have beneficiaries, so you wanna make sure that those are up to date.

So if there would’ve been estate planning in this first example, it would’ve been a much more simple process than it turned out to be. Okay?

The second example is a unmarried couple as well. Younger adults are not getting married as young as they once did or as frequently. Jacob and his unmarried partner had been together for a long time. They had a minor child, this is a common theme. No will, and this story isn’t that, hey, we gotta do something. They wanted to get this will done. Okay?

This is like the story I’d shared of an older couple where the husband was in the hospital and he is like, well, I’m getting out. I’m getting out, I’m getting out. And we’re like, hey, do you want us to come show up and at the hospital and sign this? This is all during COVID. And he said no, he is coming out, he didn’t come out. Okay?

He died unfortunately and that was [00:20:00] a mess, this is similar though. We’ve got this, my wife or my partner is my unmarried partner is in a terminal condition and hasn’t got much time to live, and let’s get this will plan done. Okay? We got it done, we scheduled a signing appointment, it didn’t happen. We scheduled an appointment to go visit them at a place where they could sign.

The partner died before that happened, and so. that’s gonna be a more complicated process too. He’s concerned the surviving spouse, their partner is concerned with potential relatives coming in for this minor child, which hopefully that doesn’t come to anything and it shouldn’t, but that’s something to worry about and it especially as an unmarried couple family, often sticks their nose where it shouldn’t be. And so that would’ve been prevented had there been a will plan in place.

The moral to that story is don’t wait, have it before something terrible happens. Right? Get your will done while you’re healthy. Okay?

The final one that I have here is actually second to last, sorry, is [00:21:00] about mother and son who were driving. Mother was driving son to his first real job after college. They got in a fatal car accident. Both died in this car accident, this twenty-two-year-old son didn’t have any planning in place. Mom didn’t have any planning in place, and so by not having any planning in place, dealing with medical issues was not good.

Unfortunately, they both passed, but dealing with hospitals and administrators at hospitals and doctors without durable power of attorney, without real legal authority is complicated and problematic, and that’s what happened in that case. So that’s not an asset thing or a kid thing. Even if you’re a college kid, just graduating college, get a power of attorney.

If you have kids that are in college as adults. 18 years old and up, have them do a durable power of attorney. Okay?

And on a previous episode, finally, I’ll talk about this one again. On a previous episode, we talked about a son who died here in Washington. He was not from Washington, his single mother lived out of [00:22:00] state. He died unexpectedly as a younger man in his early thirties. He was in the tech industry, so he had money from his job, employee benefits. He had a nice 401k, life insurance, all these things.

But because he was a young kid and not thinking about it and his mom wasn’t thinking about it, he had no plan. He had no map as to where anything was, the case basically turned out to be a you know, putting the pieces together, this puzzle. And some may not have ever been found just because getting access to things like Google passwords or apple passwords is not as easy as you might think, and if you don’t have someone’s name on your account like that, Google and Apple and these tech vendors don’t often like to get access to people’s technical accounts, right?

Their email accounts and their Google account and all these things, right? Apple, and a lot of the time, and in that case, we had to get court orders just to get access to [00:23:00] emails and to records passwords so that they could see where they might have bank accounts and investments and all that kind of stuff. Okay?

And so, it makes sense, right? It’s much easier just to do a simple plan. So if you know someone or are someone that is younger, do your estate plan. It’s not hard to do, it’s not expensive necessarily to do a young adult estate plan. It’s very reasonable, right? If you’ve got children or grandchildren that are in this range, encourage them to set up an estate plan, right?

If you’ve got college kids, get a durable power of attorney for them for financial and medical decisions. Okay? If they’re an entrepreneur out of college and they’re gonna be rich, make sure they’ve got their business plan set up. Okay? Make sure they have a will set up. And so, those are the kinds of things that we’re talking about today.

That’s why we’re doing this episode just to sort of alert and educate that estate planning is not just for the elderly. It’s not something that just happens [00:24:00] or is dealt, deals with things that happen when you die. It also deals with things that happen while you’re alive. And having a plan in place just simplifies everything, even if it’s a simple will designates an executor and designates at a beneficiary, right?

It’s nine day difference versus not having a will. A lot of the time, and this is something often to consider too, even a minor thing to do, right? If you’re a younger adult, unmarried, or even young married, right? Or you’ve got children that way, or grandchildren, tell them this, right?

Make a list of your assets, right? Make a list of your accounts. What banks do you use, right? We talked about this before. Make a list of your assets, it’s not that hard. What banks do you use? Do you have a financial advisor? Do you have an accountant? Do you have life insurance? Do you have investment accounts? Do you have 401k’s?

Do you have an IRA from an old job? Do you have a 401k that’s still sitting at an old employer because you haven’t transferred it to an IRA? Write that down, right? And say Mom or dad or buddy or sister or brother or [00:25:00] whoever, right? This is where I keep my personal stuff, if something happens to me, look at this document. Right?

That’s not all that you should do, but that’s very helpful. Okay, so in addition to an estate plan, make a list.

So, that’s it for today’s episode, I think we’ve got it. If you’ve got younger kids that are in this age group, encourage them to look at their estate plan. If you are one of those younger adults, take a look at your estate plan please, and you’ll make life a lot easier for your relatives and friends down the road.

I’d like to thank you for listening to today’s episode of Legacy Talk. If you’d like today’s episode, would like to learn more, please like and subscribe for more great content.

I’ve been your host, James Jones, to your legacy.

Narrator: Thank you for listening to the Legacy Talk podcast by attorney James A. Jones. If you found today’s episode helpful, we ask that you like and follow us on all major platforms so you don’t miss out on the latest episode. If you have questions for Attorney Jones, reach out at [00:26:00] info@joneslegacylaw.com or visit our website at JonesLegacyLaw.com

join us again next week for another episode of the Legacy Talk podcast.