This article is sponsored by Trust & Will.
It’s easy to overlook the importance of estate planning. After all, most of us don’t enjoy thinking about what should happen after we are gone. But the benefits of estate planning can set up a bright financial future for your family, even if you aren’t around to provide for them.
Today, we’ll take a closer look at the importance of estate planning and having a will in your 30s. Trust & Will is a modern approach to online estate planning that is on a mission to ensure every American is able to leave a lasting legacy.
The importance of estate planning
Estate planning is a financial task that many choose to skip for many years. In fact, a 2021 survey found that 2 out of 3 American adults do not have an estate plan. The number of adults that have a will or trust typically increases with age. But it is important to set up an estate plan as early as possible - and with the onset of COVID-19, the number of young adults with a will increased by 63% since 2020.
Your 30s are also an especially important time in life for estate planning. And this because this is the decade where you are likely to experience many life transitions and take on new responsibilities. From marriage to parenthood, to your first home to taking care of elderly parents - your 30's are a busy decade.
That being said, let's delve into the reasons why you should start an estate plan, especially in your 30s.
Protect the financial future of your loved ones
The number one reason to set up a will or living trust is to protect the financial future of your loved ones. Although it can be difficult to think about the possibility of not being around for your family, setting up a will or living trust can ensure they will always be taken care of.
Remember, trusts are not just for trust fund babies or the super-wealthy. A trust can set up a stable financial future for your family whether or not you have extreme wealth. An estate plan is the most effective way to build multigenerational wealth for your family.
Reduce estate taxes
Paying taxes is an activity that most of us don’t enjoy. If you’ve ever filed your own taxes, then you understand the detailed paperwork that can make anyone bored. Plus, the act of giving up your hard-earned money can be a challenge.
But without a will or living trust in place, your estate may pay more in taxes than is necessary. Luckily, proper estate planning can help to minimize the tax burden facing your heirs.
Avoid probate court
Probate is a process conducted by the court to gather your assets, settle your debts, and distribute your assets after your death. Without a will or trust in place, your loved ones could be forced to sit through a lengthy probate process before taking ownership of the assets you’ve left behind.
Unfortunately, the probate process can drag on for an extended period of time. For example, prior to the recent pandemic, the average probate process was between six to nine months in the state of Florida. In New York, on the other hand, the average was 15 months. However, right now due to the impact of the recent pandemic, individuals who pass away today are looking at 2-3 years on average in probate court to settle their estate due to backups caused by Covid.
If your loved ones were counting on your financial support, they could be stuck in a difficult position until the probate court handles your estate.
Keep in mind that probate prices vary based on the asset levels. For example, in California, a $1 million estate could cost $25k-$50k in probate costs depending on whether you use a lawyer.
Control your assets appropriately
Through estate planning, you can create a trust or a will. With a trust, you can maintain control over your assets while you are still alive. Trusts can be designed to allow you control over how your assets will be distributed and when those distributions will occur.
For example, you can use the structure of a trust to dole out your assets to your children in small increments. In contrast to a will, which would provide a lump sum to your children, a trust can allow for a lengthy period of small amounts of financial support.
You can set up the distribution of the assets based on age. Or you can set up the trust based on other life events, such as graduation from high school or college.
Plan ahead for the worst-case scenario
It can be upsetting to think about the worst-case scenario. Most of us would prefer to stay busy and avoid the possibility of leaving our loved ones behind early. But estate planning is the best way to protect your loved ones after you pass away or if you become incapacitated.
With a will or a trust in place, you can sleep easier knowing that your loved ones will always be protected financially.
Create a fair division of assets
An estate plan that is dividing up entirely cash assets may be easy to do. But when you have complex assets, it can be more complicated to divide things among your heirs.
If you make these decisions now, you’ll save your family the difficulty later. Unfortunately, it can be easy for grieving family members to fight over an unclear division of assets. But if you make a clear plan ahead of time, everyone can move forward based on your expressed wishes.
When should you create an estate plan
It can be easy to put off estate planning until later in life. But many financial advisors recommend starting an estate plan when you become a legal adult at age 18.
Of course, your life will likely change dramatically over the years, so it’s important to keep things up to date. After setting up the initial plan, you should make updates and adjustments every three to five years.
It is normal to think that estate planning isn’t relevant to you at 18. But taking the time to set up an appropriate plan for your assets in the worst-case scenario. If you’ve avoided this task so far, take some time to make your way through our end-of-life planning checklist in the coming months.
Reasons to create an estate plan
Not convinced of the importance of estate planning? As mentioned earlier, your 30s are likely a time of many life transitions. Here are some reasons to create an estate plan based on your life events.
Becoming a homeowner
A home can be a major asset or a large burden, creating a plan to cover the mortgage is important.
Opening a savings account
Have any money in the bank? Who should it go to after you’re gone?
Newlyweds should set up their estate plans to take care of each other.
A divorce is a critical juncture in your finances, make sure to update your estate plan.
Having a child
A new little one can change your life and your financial priorities, protect their future with an estate plan.
A windfall can create a new financial reality, make adjustments to your estate plan as needed.
Building generational wealth
Estate planning is a great way to help build multigenerational wealth for a family wanting to create a long-term legacy for the next generation.
Protecting digital and social assets
Online estate planning is also a great way to protect any digital/social assets (bitcoin, cryptocurrency, social media account passwords, airline miles, etc.) that you may have. As these can all be included in your estate plan.
Although there are other reasons to create an estate plan, these life events might push you to make some decisions on your estate plan. Don’t let the opportunity to protect the financial future of your loved ones pass you by!
How to create a living will and trust
Are you ready to create a living will and trust? Luckily, there are affordable options for anyone that is interested.
With the help of Trust & Will, you can set up your estate plan online without breaking the bank. Their plans start at $39 and are completely customized by estate planning attorneys for your particular state laws. By creating your plan online, you can easily make updates or changes to your plan in the future as well as digitally share your estate planning documents with your family. Take action and move forward with your estate plan today.
The bottom lin =e: Estate planning is important
The benefits of estate planning cannot be understated especially in your 30s as you likely take on new responsibilities. With this useful financial tool, you can set up a future for your loved ones even if you aren’t around to provide for them. Now you know the importance of estate planning! Ready to get started? Get 10% off any estate plan from Trust & Will by using the promo code CLEVER10 at checkout!