Estate planning is all too often regarded as something that only the elderly, well off person should be thinking about. However, estate planning should start early in adult life and should of course be an ongoing process that is continued well into old age.
And whilst the estate planning requirements of early adulthood will differ to that of later in life it still needs to be properly structured.
This is the advice of fiduciary expert David Knott of Private Client Trust who provides some guidance on Estate Planning for younger generations.
“An estate is everything that you own. It is your bank accounts, your cars, personal possessions, furniture and your property, if you own any. This includes jewellery, electronics, family heirlooms, musical instruments, collectables and memorabilia and even digital assets such as a website or social media accounts.”
“More often than not, a younger person drafting their Will will be starting out with little by way of an asset/capital base but will have liabilities and commitments that the older person will have outgrown,” says Knott. “However estate planning and the creation of a Will is important, because even a young person with few possessions can become the victim of an unexpected accident or illness that renders them incapacitated or takes their life and your Will speaks for you when you no longer can.”
“Only later will the need and want arise to settle into marriage and purchase a house - and in time children will follow. This individual will then suddenly become very conscious about the long term obligations of educating these children, paying off the bond on this home and other debts, whilst also ensuring that they have provided for his or her partner should death intervene.”
Knott advises that it is at this time that the services of an assurance and benefits advisor is required. “The advisor should ensure that adequate life cover is purchased to cover outstanding debts, future maintenance obligations and to provide liquidity in the estate. They will also need to verify that the young client’s medical aid, if any, is sound and if not to purchase an additional hospital plan and cover for dread disease, accident and loss of earnings. This is particularly relevant where the client is self employed.”
“It is true that as you get older your estate grows and so your estate planning may become more complicated as you factor in dependants, business ventures, more valuable assets, possible second marriages etc. in your Will. At this time it is essential to ensure you have a sound, comprehensive and clear Will so that you can be sure you have looked after your loved ones needs.”
“As this shows, estate planning is not just for baby boomers or for those in generation X. Even millennials can benefit from creating a solid estate plan. Millennials who have not yet taken these important steps are encouraged to seek the advice of a fiduciary expert who can help them create a comprehensive estate plan that meets their needs and wishes,” concludes Knott.