Why Everyone Needs an Estate Plan—No Matter Their Income

Estate planning isn’t reserved for the wealthy. In fact, everyone—regardless of net worth—should have basic estate planning documents, even as early as age 18. A recent article from Market Watch, “People think $1 million is the magic number to start estate planning—but it’s much lower,” emphasizes the importance of estate planning at all stages of life.

Why Estate Planning Matters for Everyone

Contrary to popular belief, estate planning isn’t solely about protecting wealth—it’s about protecting your wishes and easing burdens on loved ones. Unfortunately, many Americans avoid estate planning, either because they feel uncomfortable thinking about death or believe they lack sufficient assets to justify a plan. This leaves families in difficult situations when a loved one becomes incapacitated or dies unexpectedly.

Without an estate plan:

• Your wishes regarding assets, healthcare, or guardianship may not be followed.
• Your estate may face higher taxes and legal fees.
• Your loved ones may need to petition the court to appoint an administrator, a process that can be time-consuming, stressful, and expensive.

Worse, the court could appoint someone outside the family to manage your affairs, regardless of your preferences.

Dispelling the $1 Million Myth

A survey by Charles Schwab revealed that many people believe estate planning is only necessary when they accumulate $1 million in assets. Yet nearly half of the respondents agreed that estate planning should begin well before reaching this threshold.

Estate planning is about more than just wealth—it’s about ensuring your wishes are honored and protecting your loved ones from unnecessary hardships. Basic documents like a will, power of attorney, and medical directives are essential for everyone, no matter the size of their estate.

Gifting and Generational Differences

The survey also found generational differences in attitudes toward gifting:

• Millennials are more likely to plan on giving away assets during their lifetime, reflecting optimism about their financial futures.
• Boomers tend to be more cautious, with only 19% planning to gift assets before passing.

Regardless of your approach, estate planning ensures your assets are distributed as you intend—whether during your lifetime or after.

The Basics of an Estate Plan

Every adult should have at least these essential documents:

• Power of Attorney: Designates someone to manage your financial and legal affairs if you become incapacitated.
• Medical Directives: Allows someone to make healthcare decisions on your behalf.
• Will: Specifies how your assets should be distributed and who will oversee the process.

For more complex needs, an estate plan may include trusts, charitable giving strategies, and plans for business succession. An experienced estate planning attorney can tailor these tools to your unique circumstances and goals.

Estate Planning Is for Everyone

Whether you have a modest bank account or significant assets, estate planning is about protecting your loved ones and ensuring your wishes are respected. At The Werner Law Firm, our estate planning attorneys are committed to helping individuals at every stage of life create personalized estate plans.

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

Reference: Market Watch (Dec. 7, 2024) “People think $1 million is the magic number to start estate planning—but it’s much lower”