The simple answer is NOW! That’s right. You should do your estate plan now. While I wish there was some magical age or life event that triggers the need for an estate plan, the truth is, after age 18, if you don’t decide for yourself, the State of California will decide for you!
Many times individuals are waiting until they have children, purchase a home or have “enough” assets to pass on. While these are significant milestones in one’s life, they do not trigger the need for an estate plan as the need existed when you turned 18 when your parents couldn’t make decisions for you any longer.
At 18, your parents lost the legal authority to make medical decisions for you, making it critical for young people to execute an Advance Health Care Directive. This is the most basic of the estate planning documents and does not require any assets! If you don’t decide who will make medical decisions on your behalf and you are unable to make them for yourself, the State of California will decide for you through a Conservatorship of the Person proceeding.
At 18, your parents lost the legal authority to speak on your behalf and to make financial decisions for you. If you are in an accident and are unable to handle your financial affairs and you have not executed a Power of Attorney, the State of California will decide who will have legal authority to manage your financial affairs through a Conservatorship of the Estate proceeding. Remember, the Power of Attorney only appoints someone to handle your financial affairs while you are living!
Upon your death, if you want to say who should receive your estate, when they should receive it, and who should represent your estate, then you need to execute a Will or Living Trust. Alternatively, the State of California will appoint someone to manage your estate (who may not be who you would have selected) and will distribute your estate pursuant to the laws of intestacy (your next of kin); again, individuals who you may not want to receive your money!
Bottom line, irrespective of your age or how much money you have, if you want to make decisions for yourself rather than the State of California choosing for you, you need to do an estate plan. This will eliminate the need for a Conservatorship of the Person and Estate and avoid the Probate process at your death, ensuring that less money is spent on attorneys, court and even the IRS and leaving more of your estate to be distributed to the individuals or entities you would like to benefit from your estate.