Recently, while discussing estate planning with one of my friends, I was asked why she, as a single person, needed to draft a Will. After all, she has no kids, no spouse, she's not wealthy, and she's only forty-two. I'm quite sure she's not the only one who looks at estate planning from this perspective. I explained to her that (1) she may have kids in the future, (2) forty-two is rather late to start planning, and (3) she likely has a larger estate than she thinks that she can protect with a properly drafted Will. In fact, once we started talking, here's what we discovered:
- She intends to have children before she turns 45, with our without a spouse. That means either via adoption, a surrogate, or in vitro fertilization. She can factor these plans into her Will so that her assets are distributed to, or held for, any future children that she has.
- She has a home worth $400,000.00, a luxury car, stock options, two life insurance policies, a 401k, an IRA, two checking accounts, three savings accounts. For someone who thought she had few assets, she has quite a bit. In fact, all told, her “estate” is close to one million. As she gains more stock options and makes other wise choices, it is easy to see that her portfolio of assets will grow even larger. A Will to dispose of these assets as she desires is essential. Estate planning now can save her later from possible estate taxes (depending on the laws in effect at the time of her death) and other legal issues.
- She has nieces and nephews that she would like to give gifts to and also make distributions to after her death. If she planned now, she could make gifts to these nieces and nephews now and save herself on taxes if those gifts qualified under the gift tax exemption. Further, if she died while her nieces and nephews were still minors, she could set up trusts through her Will to manage the bequests to them until they reached majority age, or some other event, such as graduation from college.
The point of this is that there are options available to my friend if she would just look into it and think about the future. That's the key, the FUTURE. None of us knows what it will bring, in terms of longevity of life, prosperity, illness, twins, triplets, and so on. Better to be prepared than be caught off-guard and unprepared. I advised my friend to start her planning now and get a Will done, whether she drafts it herself, or seeks the services of an experienced attorney (which, in her case, is the safest route given the fact that her estate might be more complex than some others). I give this same advice to those reading this blog – get prepared. A properly drafted Will can be your best friend, open the door and say hello!