Houses And Kids: Two Things Millennials Need To Plan For

So you’re a millennial, and because of that, you figure estate planning isn’t for you. Leave estate planning to older people or richer people. But if you’re a millennial, you could have two things that make estate planning an important thing in your life: a new home, young kids…or both.

Probate With a Home

For millennials-or anybody—with a home, there are some important estate planning issues.

But before we discuss them, why do you need estate planning for a home? Why not just let the probate court handle the home, and have the home divided as state intestate laws dictate? Maybe you have no extended family or children of other marriages or anything else that would seem to warrant an estate plan.

The problem with “just leaving it up to the court” is that when your home is sold through the probate process, the costs of probate may well eat into most or all of those profits, leaving your beneficiaries with much less than they would have received if you had planned for the home in your state plan.

That’s because many fees, like lawyer fees, or appraiser fees, are based on the gross value of the home. That’s right—gross value, not equity. That means that if there’s moderate equity in the home, but the home has a significant gross value, the costs involved with the probate process could eat into all of the equity that was supposed to go to your beneficiaries.

And all this is aside from the time it could take your beneficiaries to reach the profits in the home, as the court system is both slow, but also, heavily involved in the sale and distribution of proceeds from a home in the probate process.

What About the Kids?

Another thing millennials have, are kids who tend to be younger. That makes estate planning all the more important, in the sad event that both parents pass away. This is more likely with millennials, who are younger; they may not pass away because of disease or old age, but rather, in an accident of some sort, which could claim the lives of both parents.

If that does happen, who will watch over the kids? Do you really want surviving relatives like grandparents fighting over who gets or watches over the kids? And even if a suitable home is found, where will that be? You’d probably prefer some stability for the kids—keeping them in an environment, home, or school, that they are used to.

And if someone will take care of your kids, will that same person handle the funds that you leave for the caring and upbringing of your kids? You may want to separate those duties between two people, to avoid conflicts and to ensure that the money you leave for your kids is being used for their good and towards their own benefit.

Do you have a house? Or kids? Then you need to try to avoid the probate process. Call the Torrance will and estate attorneys at Samuel Ford Law today.

Sources:

selfhelp.courts.ca.gov/probate

selfhelp.courts.ca.gov/guardianship