You’re never too young to begin estate planning
Eileen St. Pierre, The Everyday Financial Planner
Last month, the population of my town doubled. The speed of traffic has increased. Pedestrians are all over the place, with their eyes fixed to their cell phones, totally oblivious to the world around them. Yep, college is back in session.
I know it’s hard for people so full of life to think about, well, the end. But you are never too young to begin estate planning. Estate planning involves making important decisions for the people you love. People without an estate plan die intestate, which means the inheritance laws of your state dictate how your property is passed on to your heirs. For college students and young adults, even if your property will pass to your parents, that process is sped up – and cheaper – with a simple will.
What’s the rush?
One important consideration for young people with minor kids is the need to appoint guardians for those children, and the only way to do that is through a will.
- College students, who generally will not have a lot of financial assets, can list their parents on bank accounts as co-owners or as beneficiaries using a Payable on Death (POD) designation.
- The transfer of cars and other personal property can be taken care of in a will. Some states allow for Transfer on Death (TOD) designations for vehicles – AZ, CA, CT, IN, KS, MO, NE, NV, OH, and VT.
- See my Understanding (and Avoiding) Probate column for more information on POD and TOD designations.
Creating a Will
For a single person with no kids and few assets, a simple will prepared by a lawyer could run $500 to $1,000 depending on the state. Because their estates are not very complex and they are used to using technology, young people may want to consider one of these do-it-yourself options:
- Use software such as NOLO (starting at about $30). Similar to tax-filing software, the program asks questions and walks you through the entire process, automatically tailoring it for your state and using the proper legal language. Be sure to pick up the most up-to-date version of the program.
- Use an online site such as LegalZoom, where the cost of a will starts at $69. Just be aware such sites usually offer additional help – say, talking with one of their attorneys – for an extra fee.
- If you go the do-it-yourself route, make sure you print out the will and have it notarized. You will need the signatures of two witnesses and be prepared to pay a notary fee, usually at least $15.
Every adult over the age of 18 should complete an Advance Directive for Health Care, which includes
- a living will,
- appointment of a health care proxy,
- organ donation, and
- general provisions.
A living will indicates if you want to be kept alive by artificial means, while a health care proxy is someone who can make medical decisions for you if you cannot make them for yourself. In cases in which young people do not live close their parents, health care proxies can make it easier for parents to communicate with medical personnel from long distance.
If you believe your parent or guardian would be unable to carry out your wishes, consider someone else such as an adult brother or sister to make those decisions for you.
Organ donation and “living as a vegetable” may not have been discussed at the dinner table so it’s important for families to know children’s wishes.
Advanced Directives are specific to your state. Your state’s Department of Human Services website should have links to the appropriate form – you should not have to pay for it.