Video: Estate Planning for Young Adults

Video

Good morning, folks. It’s Andy Stautz with Stautz Law and we are back today with another estate planning talk. Today’s topic is estate planning for young people, young adults, really. Because I’m a young adult, lots of my friends are young adults and so I get the question all the time: “Hey, Andy, if we came in to you for an initial planning meeting, what would you recommend? What do we need to be doing right now?”  

You know, obviously that’s a complicated question because everyone’s situation is different. But there are enough similarities between young adults that it’s worth talking about the the basics.  

So consideration #1 is: What is your property? I mean, how much do you have to protect and is it worth going to any trouble about it — because you know maybe you’ve been in grad school through your 20s, or maybe you’ve been, you know, kind of finding yourself, trying different careers; who knows what you might be 30 years old and have no assets. Well, then, you probably don’t want to be paying an estate planning attorney to come up with a plan for you, because why!?  

But as you start getting more, I think you need to keep an eye on that because some, some, some young adults, married or unmarried, get into their 30s and OK, you’ve got some retirement accounts. Maybe you’ve got a house, you know, rental properties, if you’re into that. So as you start amassing wealth, as you start doing well for yourself, that’s great. And that’s when it starts, you know, OK, you probably don’t want all of this escheating to the state or accidentally going somewhere you don’t want, or costing your family tons of money in probate. So that’s trade off #1 

#2 is kind of: “OK well, how how does your situation relate to the default rules?” Because as as I’ve discussed in my other videos, you know, “do you need a will?” You know, “do you need an estate plan?” There are default rules. There is intestacy. There’s a priority of healthcare decision makers, so. If you’re unmarried and childless. You know, maybe those default rules do a pretty good job for you.  

If you’ve got preferences that are different, you know, especially if there’s conflict with your family — because If you are unmarried and childless, your parents are still kind of your number one beneficiaries and your number one decision makers if you’re incapacitated –so you know if you want to avoid that for whatever reason, you know, then that that weighs in the balance in favor of, “OK, you need some deliberate estate planning.” And I’ll cite the I’ll cite the actual law in the written version of this, just so you have it.  

So that’s kind of Part 1 of the discussion is how much do you have to protect and how do your preferences relate to the default preferences? Because if you don’t have a lot and your situation is well handled by the default rules. You know, what’s my recommendation for your estate plan? Not a lot, you know. Making a will if you can afford one, making sure of your beneficiary designations are a big one. You know, if your only asset is a retirement account, it’s like OK well. Go on your own. Make sure the beneficiary designation is who you want it to be. You can do that yourself. You don’t need to… You don’t need to pay anyone to do it.  

Yeah, so closing thought for today then is, yeah, the more complex your situation gets, the more property you amass, the more it’s worth it to to sit down and have a planning talk. And. That’s when the the the balance starts to come out in your favor of. OK, yeah, it’s an upfront cost you need to budget for it. You need to have free cash flow to meet the planning expense. But it’ll, you know, the more property we’re talking about, the more you’ll save on the back end and you know, the better that works out for you.  

So those are big considerations. That was Part 1 of this talk. I’m going to break it into two parts and then Part 2, we’re going to talk about some specific dispositions and planning recommendations that I’m often making. So stay tuned for that. Bye now.