It can be difficult to emphasize the importance of having an estate plan to people who are young and have yet to start their family. Young individuals often assume everything will go to their spouse and if they are not married, to their closest family members.
A recent case making national news is a sad reminder of the importance of having an estate plan no matter your age. Morgan Freeman’s granddaughter was tragically murdered by her boyfriend in New York this year. She had no children and no will. According to New York statutes’ definitions of heirs (which are similar to those of Texas), with no children, her estate should pass to her parents in equal shares. Unfortunately, the granddaughter had no relationship with her father; reportedly, it was her famous grandfather who was the father figure in her life. Mr. Freeman was extremely generous to his granddaughter and purchased an $800,000 townhouse in New York for her to reside in while she pursued her own acting career. Now, after her passing, this townhouse is centerpiece of her estate. Because she did not have a will, her estate—comprised entirely of a gift of real property from her grandfather—could potentially pass in part to her estranged father, who only surfaced after her untimely death. Does this seem fair?
Luckily, Mr. Freeman can presumably afford to hire an attorney in NY who specializes in estate litigation. For the rest of the general population, spending tens of thousands of dollars on an attorney to prove that the father abandoned the granddaughter and should therefore not receive any of her estate is not an option.
While this is of course an extreme example of what can happen without an estate plan, it’s a good reminder of how little control you have over your estate after you pass away. Without a will, the state of Texas determines who will receive any property you have at the time of your death. A will allows your wishes to be enforced. For example, if you have worked hard to purchase your first home, you may want to leave it to your siblings rather than your parents who may already be financially secure.
There are numerous other reasons to execute an estate plan when you are young. If you are over the age of 18, your parents no longer have authority to make decisions for you. To some that is a reason to celebrate! However, if you are traveling to exotic places and forgot to pay your rent, a power of attorney would be an excellent tool allowing a family member or trusted friend to help out and access your bank account. Without a medical power of attorney, if you are ever unconscious and needing medical care, legally there is no one available to make medical decisions on your behalf. Furthermore, if you’re still on that exotic vacation and you injure yourself paragliding, having the above documents authorizing your family and friends to help you with your financial and medical affairs will help bring you home as healthy and smoothly as possible.