Even at the relatively tender age of 18, people need estate planning documents, even if they only have a Power of Attorney and Health Care Proxy. Once those documents are created, parents or the person named in the POA can update their car registration or pay bills while they are away at college, or get access to critical medical information in an emergency. A recent article from Market Watch, “People think $1 million is the magic number to start estate planning—but it’s much lower,” makes a clear case for estate planning at all stages of life.

Surveys show most Americans are ignoring this advice, in part because they prefer not to think about death and because they don’t think they have enough assets to warrant an estate plan. This leaves their loved ones with a terrible burden when they become incapacitated or die unexpectedly. What I tell my clients is, estate planning is like when you buy a snowblower. When you buy a snowblower it doesn't snow that winter. I don't think it snowed for three winters in a row the Christmas after my parents gave me a sled! So, if you put your estate plan together, you'll live a long life!

Those who die without estate planning run the risk that their wishes may not be followed. Without an estate plan, you are subject to the laws of intestacy. Meaning your states estate plan for you. This may be the child you meant to disinherit receives an equal share of your estate. Or the person least equipped to fairly and efficiently administer your estate gets appointed by the court. For your wishes to be followed, they must be written down in an estate plan.

A survey from Charles Schwab revealed that people think they need to have $1 million to think about protecting their assets during their lifetime and how they want to pass them along after they die. At the same time, nearly half of the people surveyed said they agreed estate planning should happen before reaching this level of wealth.

Almost all people surveyed said they planned to give away, donate, or pass on assets, even though only 57% had a Will, and very few said they had an estate plan. An estate plan is a comprehensive plan for the future, including a Will, trusts, power of attorney, medical directives and other documents as needed. An experienced estate planning attorney creates such a plan after meeting with couples or individuals and defining their wishes for passing on assets and a plan for incapacity.

Without an estate plan, your wishes may not be followed. Your family will have to go through an expensive and stressful time of going to court and petitioning the court to name an administrator so they may manage your affairs.

Almost all millennials surveyed said they wanted to give assets away while living, which is nice.  However, they may be more optimistic than boomers about their financial futures. Many older Americans are more cautious, with only 19% planning to gift assets before they die.

Whether you have $1 or $1 million, you need at least the basics of an estate plan: power of attorney, medical directives and a will. An estate plan is critical because it gives you control over distributing assets and empowers another person to take care of your medical decisions and finances in case of incapacity.

Reference: Market Watch (Dec. 7, 2024) “People think $1 million is the magic number to start estate planning—but it’s much lower”