Paul O. Dillon, Attorney at Law

How Young Is Too Young to Have a Will?

Being young and healthy is unfortunately no protection against an early death, which is why all adults aged 18 and up and especially parents need to have an estate plan, including a will, says a recent article, “You’re Young and Barely Making Ends Meet. Why You May Need a Will,” from Barron’s.

Only about 22% of young adults aged 29—44 and nearly 15% of adult Gen-Zs, aged 19—28, have estate plans. This poses risks for their spouses, if they are married, and their children, if they are parents.

A last will and testament is used to distribute your assets upon death. This is the best-known aspect of estate planning. Still, it’s only one of several documents, including a living will, also known as an advance directive, which designates who may make medical decisions on your behalf in the event of incapacity. While someone in their 20s or 30s may not have children, they may still enjoy activities like rock climbing, bungee jumping and engaging in physically demanding pursuits. People in their 20s and 30s are statistically more likely to be injured in car accidents, skiing, or while travelling.

This doesn’t mean anyone should limit their activities. However, it does mean young adults need to have estate plans in place to express their wishes in case of incapacity or death and protect themselves and their loved ones. Once these documents are prepared and executed, parents or the individual named in the living will are allowed to communicate with doctors, access medical records and be involved in a young adult’s care. Otherwise, decisions may be made by doctors and not family members.

Young adults with small children need a will to name a guardian who will be responsible for raising their children in the event both parents die unexpectedly. If there is no will, or if the will doesn’t include a guardian, a court will decide who will raise the children.

Every adult should also have a power of attorney. This gives a person of your choice the legal ability to manage your finances, including paying bills. A power of attorney can be customized to permit your agent—the person named in the POA—to perform specific actions but not others. For instance, you may want the person to be able to access accounts and pay bills, but not to sell your Pokémon card collection.

Another important aspect of an estate plan is to verify the beneficiaries named on various types of accounts. Any assets with a named beneficiary, such as an IRA, investment account, or insurance policy, will not need to go through probate and can be transferred directly to the beneficiary. However, if the IRA you opened at your first job named your last girlfriend as the beneficiary and you’ve since broken up, make sure to change the name on the account. The beneficiary designation overrides the will, so it won’t matter if you left all your assets to your fiancé; your former partner will still inherit the account.

Estate planning attorneys assist individuals at all ages and stages of life with their estate planning needs. The estate plan you need in your 20s and 30s differs from the one you need in your 60s. However, at any age, an estate plan is essential for being a responsible adult.

Reference: Barron’s (March 15, 2025) “You’re Young and Barely Making Ends Meet. Why You May Need a Will”

What are the Changes in Estate Planning for 2025?

Federal laws about estate taxes aren’t the only ones that estate planning attorneys must stay up to date with. There are changes to state estate laws, inheritance laws, and, more recently, issues surrounding digital assets that require attention. A recent article from Dermatology Times, “Anticipated Changes in Estate Planning for 2025 What Dermatologists Need to Know,” contains information not just for doctors, but for everyone.

Will the High Federal Estate Tax Exemption End?

The federal estate tax exemption is now $13,990,000. However, it is scheduled to drop to $seven million on Jan. 1, 2026, unless a new tax law changes the expiration date. As it stands now, anyone may gift nearly $14 million (or almost $28 million for a married couple) without paying federal gift or estate tax. Once the New Year's Eve parties end in 2026, the gift and estate tax limit will decrease to approximately $7 million, applicable to gifts made during your lifetime or at your death. Federal gift and estate tax rates are 40%, which makes this exemption particularly valuable to high-income earners.

There is no way to know what will happen to these exemptions, so planning for a worst-case scenario is worthwhile. One strategy is simply gifting assets expected to appreciate to an irrevocable trust, with family members as beneficiaries. They could be a spouse, children, grandchildren, or future descendants. Such a trust also provides creditor protection, especially important when estates are large.

Inherited Retirement Accounts and Required Minimum Distributions

If you inherited an IRA before 2020, you’re exempt. However, anyone inheriting an IRA after 2020 may be subject to new Required Minimum Distributions (RMDs) starting January 1, 2025. The exceptions include being the spouse or a minor child or being less than ten years younger than the original account owner, and being disabled or chronically ill. Otherwise, you’ll have to withdraw the entire account by the tenth anniversary of the original owner’s death.

A few more details were added to this rule. If the deceased account owner was already taking Required Minimum Distributions (RMDs), the heir of the IRA is also required to take annual distributions. Suppose the original owner wasn’t required to take annual distributions upon death. In that case, the beneficiary can take withdrawals at intervals of their choosing, if the entire account is depleted within the ten years. Penalties for failing to take Required Minimum Distributions (RMDs) as required are high, so it is essential to consult with your estate planning attorney to ensure compliance with IRS rules.

Local Estate Taxes

Your estate planning attorney can guide you through the estate taxes in your state. Some states also impose inheritance taxes. The rate of the inheritance tax depends upon the relationship between the heir and the decedent. The estate typically pays the estate tax, and the heirs pay the inheritance tax. Some states impose both inheritance and estate taxes, while others do not.

Estate Issues Concerning Cryptocurrency

As more people invest in cryptocurrency, this intangible new asset class needs to be incorporated into the estate plan. You’ll want to name a digital executor who is familiar with this brave new world, as it has its own unique language and skill set. Someone who doesn’t know the difference between a cold wallet and an NFT won't know how to protect their digital wealth.

Talk with your estate planning attorney before too much of the year slips away. It takes time to plan and execute estate plans, and waiting until the fourth quarter of 2025 may not provide enough time to implement a plan to protect your estate.

Reference: Dermatology Times (March 21, 2026) “Anticipated Changes in Estate Planning for 2025 What Dermatologists Need to Know”

Should You Have a Revocable Trust?

There are many good reasons to include a revocable trust as part of your estate plan, according to a recent article from Columbus Monthly, “Planning Ahead: When to Consider a Revocable Trust.” You might think trusts are only for the wealthy. However, that’s not true. An experienced estate planning attorney can easily establish a trust to protect assets and direct their distribution. Distribution can occur while you’re living or after you’ve passed away.

Trusts also distribute assets to beneficiaries outside of probate, which avoids the delays and costs associated with probate and, even better, keeps your private business confidential between you and your beneficiaries. When a will is probated, many courts require an inventory of assets. The will becomes part of the public record, and anyone—including ex-spouses, local realtors, thieves and angry relatives—can read your will and learn about your bequests.

A tip from the professionals: ensure an estate planning professional establishes your trust. Every state’s laws are different and what your brother-in-law in Idaho did might not work in Virginia.  You should also ensure that the trust is properly funded. If you don’t fund the trust, it won’t work as you intended.

Revocable trusts are used to pass assets after you’ve died. The language of the trust is tailored to your specific wishes. For instance, you may want your children to inherit a certain amount of money every year or only when they have reached goals, such as completing college.

Trusts can be created to fund education, serve as a deposit for a home, or initiate distributions upon reaching a specific age. This is especially beneficial for parents of young adults, who understand that giving a twenty-five-year-old their entire inheritance all at once may not be as beneficial as making partial distributions over a twenty-year period.

One example of a well-structured trust is a woman who owns land that has been in her family since 1947. There are two houses on the property. The land has been placed in a trust to manage the property, and the trust language stipulates that multiple generations can continue to reside there until there are no family members who wish to live on the property. At that point, the trust allows the trustee to sell the property and distribute the proceeds to the living beneficiaries.

Trusts are also useful when a person becomes incapacitated and needs someone else to access the assets owned by the trust to manage the person’s financial affairs. A home, bank account, or all a person’s assets can be placed in a trust, and then the trustee can manage the person's affairs without needing to go to court and file for guardianship.

Whether or not you need a trust should be discussed with an experienced estate planning attorney. It has applications for protecting heirs in the event of a second marriage, incapacity and controlling assets. Your attorney will determine the type of trust that best suits your unique situation.

Reference: Columbus Monthly (March 10, 2025) “Planning Ahead: When to Consider a Revocable Trust”

Good Parenting and Estate Planning Work Together

Wealth created by one generation is often lost by the third generation when financial discipline, respect for the process of wealth creation and understanding the responsibilities of wealth aren’t taught from generation to generation. There are ways that parents can help their children and grandchildren overcome this tendency, and estate planning strategies are part of the process, says a recent article from Barron’s, “Teach Your Kids to Preserve Family Wealth, Not Squander It.”

Preparing to transfer wealth is best done with an experienced estate planning attorney. In addition, an annual letter to your children with a summary of the family’s financial situation and a statement of the parent’s values will help educate and update the family.

The annual letter should also share info about where to find wills and trusts and other estate planning documents, contact info for the estate planning attorney, financial advisor and accountant, and the location of life insurance policies. Don’t neglect an inventory of digital assets, their value and how to access them.

Trusts offer an opportunity to express values by creating a trust with incentive provisions and age-related triggers. When a beneficiary reaches certain milestones, like graduating from college or getting married, distributions can be made. There are also means of discouraging problematic behaviors. Provisions may be written to delay distributions until a beneficiary retains a job or enters a rehabilitation program and maintains sobriety for a certain period. Your estate planning attorney will discuss which type of trust is best for your family.

Start by defining your own family’s values and what it looks like to put those values into real-life scenarios. For instance, if you value entrepreneurial spirit, a trust could be created with discretionary distributions and non-binding language encouraging heirs to use the funds to start or expand a business. A trust could also encourage children to buy a home in a community with an excellent school district to benefit their children.

Stating these models without living them defeats the end goal. Children learn values by seeing how their parents behave. These lessons are learned early in life.

For high-net-worth families, avoiding a sense of entitlement is a major challenge. This is where generations lose a work ethic and wealth. Good parenting can avoid this by encouraging children to become resilient and allowing them to fail in safe settings. Developing confidence based on their abilities, whether in academics, sports, or community efforts, will foster a sense of self and independence not based on the family’s wealth.

For regular families intent on building wealth over generations, a healthy respect for the work it takes to build bank accounts, buy a home and create the stability needed for the future takes extra effort. Creating an estate plan with an experienced estate planning attorney can help you plan for the unexpected.

Reference: Barron’s (Feb. 7, 2025) “Teach Your Kids to Preserve Family Wealth, Not Squander It”

Retirees Need Six Legal Documents

Around half of all retirees surveyed have a last will and testament. Most are without crucial legal documents, according to a recent article from MSN, “6 Legal Documents That Most Retirees Need—but Don’t Have.” Here’s what you need to know about these critical documents.

Medical Power of Attorney or Healthcare Proxy. This document gives another person the authority to make medical decisions for you if you can’t make the decisions and communicate them yourself. People wrongly assume their spouse or adult children will automatically be permitted to talk with healthcare providers. This is not true, and you don’t want to find out about this in the middle of an emergency. If you are seriously injured and want your loved ones to be involved in your care, your estate planning attorney can create a medical power of attorney with your wishes clearly expressed. A downloaded form may not be valid in your state, since each state’s rules are different. You may also have wishes different than standardized forms, so you’ll want a personalized POA.

Advance Directive or Living Will. This legal document helps medical professionals and your loved ones. It needs to be very clearly prepared to reflect your wishes for end-of-life care if you can’t express yourself. The document is used when an accident, illness, or other condition prevents you from responding. Do you want to be placed on a ventilator, be attached to an artificial heart and lung machine, or receive nasal feeding? These are not easy to contemplate. However, consider what your family will go through if they have to guess what you would have wanted. An estate planning attorney should create this document to be sure it is valid when it’s needed.

Financial Power of Attorney. The financial POA allows a person of your choosing to make financial decisions for you. No one likes to give up control of their assets. However, if you aren’t able to manage and there is no POA, the family will need to go to court and petition the court to have a guardian appointed. This takes time and can be costly. Having your estate planning attorney create a financial POA while preparing the rest of your estate plan is better than going to court.

The POA documents can be as specific or as general as you wish. Your estate planning attorney will have recommendations to best suit your situation.

HIPAA Waiver. Rules on sharing medical information are strict, and healthcare providers are trained to follow the rules, or their employer may face fines or lawsuits. A HIPAA Waiver or Release allows doctors and insurance companies to share information with the person you designate.

Funeral and burial arrangements. If you don’t outline your wishes, your family will do what they think is best, which may not be what you want. Some people don’t care. However, if you do, making these arrangements in advance will give you peace of mind and, in some cases, a sense of control over your final wishes.

Trusts. A trust is used to own assets designated for beneficiaries. It is used to move assets out of the probate estate, so they go through probate and can go directly to the named beneficiaries. Many people have trusts, so they have better control over their assets while living and after passing.

Like a last will, these documents must be reviewed and updated every three to five years. There are changes in our lives and tax laws. Make sure your wishes are reflected in your estate plan with regular reviews.

Reference: MSN (Feb. 24, 2025) “6 Legal Documents That Most Retirees Need—but Don’t Have”

What Kind of Trust Helps a Family with Young Children?

Trusts are not just for wealthy people. They are used when a family has young children and wishes to ensure that there is a plan in place to care for the children in case the parents die or become incapacitated. A recent article from Business Insider, “I asked an estate planning attorney the best way to establish a trust for my 2-year-old daughter,” explains what parents can do to protect their youngest loved ones.

There are a few different trusts to consider, depending on your situation:

Revocable Living Trust. The revocable trust is the most flexible. It is a separate legal entity with language directing how assets will be used for different scenarios. For instance, if someone dies or becomes disabled and their beneficiaries are all children, the trustee will manage and allocate necessary financial resources to support the children. Many estate planning attorneys consider a trust even more important than a will, since it doesn’t require the estate to be settled before trustees can access the assets.

An IRA Trust. You may want to consider creating an IRA trust if you own an IRA. This allows a minor child to be the beneficiary of the retirement account. On the death of the IRA owner, assets go into the trust, which has a trustee who manages the asset until the person comes of age or whenever the original owner wants them to receive the money.

When a regular IRA account is left to a minor, the family must petition the court to obtain a court-appointed guardian to manage the account until the minor is of legal age. With an IRA trust, you’ve clarified who the trustee should be and when the child will receive the money. If the money is not needed and can remain in the trust, it is a protected asset for their future.

A Trust for Minors. This allows you to leave assets to a child until they reach a certain age, which you articulate in the trust. You can leave all or a portion of the money to the beneficiary to be distributed when you feel they can manage it. You decide when to release the funds, who the trustee should be, the rules for how the money is to be spent and when the minor may receive income.

An Education Trust. In addition to creating a 529 College Account for a minor child, it’s a good idea to create an Education Trust to be sure the funds will be used for education. You can assign a certain amount for education and state the age you’d like the beneficiary to receive any leftover funds.

An estate planning attorney can help you create a plan for your children or grandchildren to ensure that they have the funds they need in case of tragedy and place guardrails on the money so it’s protected.

Reference: Business Insider (Jan. 31, 2025) “I asked an estate planning attorney the best way to establish a trust for my 2-year-old daughter”

How to Create an Estate Plan That Works

An estate plan tells your loved ones and the courts how you want to divide your property, as well as protecting heirs from the expenses and stress created when there is no estate plan. According to a recent article from AOL, “Estate planning checklist: 7 key steps to making a successful plan,” an estate plan also saves your family from months, even years, of dealing with courts and government bureaucracies in settling your estate.

How to start? Follow these steps.

Make a complete inventory of your assets, both tangible and intangible. This means real estate, cars, financial accounts, digital assets, life insurance, retirement accounts, pension accounts and personal property. Save your heirs from a scavenger hunt and protect assets from being lost.

Decide who you want to care for your family. If you have children who are underage, name a guardian in your will. The guardian often serves as the conservator, managing the children's financial assets. Check on your life insurance policies, which provide funds for your family after you’ve passed.

Ask potential executors if they are willing to do the work. The executor carries out directions in your will. It can be a big responsibility. They’ll need to gather and manage assets, notify heirs, Social Security, Medicare, pay estate taxes, secure and possibly sell your home, and more.

Have an experienced estate planning attorney set up at least three key elements: a will, power of attorney and advance healthcare directive.

The Will names a guardian and an executor and gives directions for distributing assets. The biggest estate planning mistake people make is not having a will. When this happens, the court assigns someone to manage your estate, and your family will have to live with whatever the court-appointed person decides.

A Power of Attorney allows someone to care for your business affairs if incapacitated. A Medical Power of Attorney, or Healthcare Proxy, will enable you to name someone to be involved with your healthcare, speak with your doctors and health insurance company and help make decisions for you. These documents should be customized to convey your wishes as to how much or how little you want these people to be able to do.

An advanced healthcare directive is used to state your wishes if you are incapacitated about what kind of treatment you do or don’t want to receive if you are at the end of your life. For instance, if you don’t want to be resuscitated or if you don’t want CPR to be performed, this information goes into the AHD. This document can be challenging to consider. However, it is a blessing to spare your family from having to guess your wishes during a time of crisis.

Discuss the use of a trust with an estate planning attorney. Trusts are not just for wealthy people. Some trusts take assets from your taxable estate and distribute them directly to beneficiaries outside of probate. Many kinds of trusts serve different purposes, so your estate planning attorney will help you understand which is best for your purposes.

Determine who to leave your assets to and how to structure your estate. If you have young children and you don’t establish the correct trusts, they may inherit everything when they turn 18 or 21. This is rarely a good idea.

Tax planning is a part of estate planning. While you may not face federal taxes, your state may have its estate tax, and some states still have inheritance taxes. Rates and exemptions are different in every state.

The incapacity planning part of an estate plan is for you. However, the rest is for your family, to take care of them and show them how much you care about them and their futures.

Reference: AOL (Feb. 4, 2025) “Estate planning checklist: 7 key steps to making a successful plan”

Should Your Estate Plan Include a Trust?

Estate planning is like getting an oil change for your car or going to the dentist. There are other things you’d rather be doing. However, you know these are things you must do to avoid far more expensive problems later on. Estate plans are personalized, based on your needs and situation. One strategy you may want to consider is a living trust, as explained in a recent article from MSN, “3 Reasons to Seriously Consider Using a Living Trust to Pass an Inheritance to Your Family.”

One of the reasons for having a living trust is to avoid the probate process. This is a legal process where a court decides if the will is valid, approves the executor and oversees the distribution of assets left through the last will and testament. If a person owns property in multiple states, probate must take place in each state. Probate can take months or, in the case of complicated estates, years. A living trust distributes assets to beneficiaries without the court's involvement.

Passing assets through trusts provides more privacy than going through a will and, hence, through probate. When a will goes through the probate process, it becomes a public document, and anyone can read it. This means your will could be read by disgruntled family members, creditors, an ex-spouse, or thieves looking for victims.

Details about a living trust, including assets, beneficiaries and terms of the trust, aren’t part of the public record. This is useful for two reasons—avoiding potential conflicts with those who did and those who did not receive inheritances and shielding recipients from potential scammers. Sadly, there are numerous cases of families who fought bitterly over inheritances after they obtained the will from the local courthouse.

Living trusts offer a great deal of flexibility. They can be modified in any way desired by the grantor (the person creating the trust) if they are living. The trust can be modified to reflect life events like marriage, divorce, death, or financial changes. Having the ability to make these changes works well for those concerned with aligning their wishes with their estate plan.

One final note: when you create a trust, you must place assets in the trust to fund it. This usually occurs by retitling the asset to be owned by the trust and not by the grantor. Your estate planning attorney can help make sure you do this last step. Failing to fund the trust is critical for it to perform as you want.

Discuss your overall estate plan with your estate planning attorney. There are many different types of trusts. The attorney will be able to help you decide which one is best suited for you. You’ll also want to be sure any trusts created align with your estate plan.

Reference: MSN (Feb. 3, 2025) “3 Reasons to Seriously Consider Using a Living Trust to Pass an Inheritance to Your Family”

How Do You Pick an Executor?

Most people consider a spouse, an adult child, or a sibling the executor. If there’s no spouse or no children, usually another family member, like a nephew, niece, or responsible child of a close friend, is a good alternative. Who you name to be your executor is an important decision and one to be made with care, according to the article “The right executor is key to honoring your wishes” from Cleveland Jewish News.

The executor needs to be trustworthy, understand financial matters and have the time to take on the many tasks of this role. Rarely is there a perfect candidate. However, someone with the skills and can be trusted to fulfill the decedent’s wishes is the right pick.

It’s not unusual for a family member to not be fit for an executor's responsibilities. No matter how much you love your spouse, if they can’t manage financial matters or have a history of making poor financial decisions, you may want to name someone else to serve as your executor.

Figuring out who can be the executor as far in advance as possible is as important as having an estate plan. Here’s a list of some of the duties of the executor:

• Gathering death certificates, usually from the funeral home, to notify various entities.
• Submitting the Last Will and Testament to the probate court for review.
• Notifying the Social Security Administration.
• Notifying your state’s Department of Motor Vehicles
• Establishing an estate account and applying for a tax ID number.
• Notifying financial institutions, financial advisors, CPAs, employers and health insurance companies.
• Gathering and managing all financial assets while the estate is being settled.
• If the decedent owned a home, ensure that the house is secured and maintained while the estate is settled.
• Contacting beneficiaries and coordinating with trustees if there are trusts.
• Paying estate taxes and personal taxes.
• Managing digital assets.
• Distributing the assets to heirs.

When the executor does their job, most of the time, it all goes smoothly. However, if the executor ignores the decedent's wishes, the court can remove the executor. Someone who makes perfect sense as an executor on paper may not always be the best candidate for the job.

If you don’t have a will, the court will appoint someone to manage your estate and follow state law to determine who will receive your money and assets.

Everyone must have a last will and a comprehensive estate plan, whether they have a modest home or a mansion. Having someone who will carry out your wishes is the only way to be sure that the wishes expressed in your estate plan will be carried out.

Reference: Cleveland Jewish News (Feb. 3, 2025) “The right executor is key to honoring your wishes”

Why Is Estate Planning Important?

Estate planning is part of long-term planning, no matter what the size of a person’s investment portfolio or their total net worth. It protects the individual and their property, which is why everyone needs an estate plan. Estate planning is an umbrella term used to refer to everything from asset allocation after death to planning for incapacity and end-of-life healthcare decisions, according to a recent article in The Daily News, “What to know about estate planning.”

Typical components of an estate plan include a last will and testament, power of attorney, healthcare directives and trusts. Most surveys conducted in the last few years show only a third of all American adults have a will, and more than half think they don’t need an estate plan because they don’t own enough assets.

Here’s all you need for an estate plan to protect yourself and your loved ones:

A will is the document used to distribute assets after your death. Working with an estate planning attorney who knows the laws of your state is the best way to ensure that your wishes are followed. Trying to do this on your own or with an online platform puts your will at risk of being deemed invalid by the court, which would put your entire estate into the hands of your local probate court.

The will is used to name an executor to carry out the directions you’ve expressed in the will. It is also used to name a guardian if you have minor children. Without a will, or if a will is found to be invalid, the court will name someone to take over distributing your assets. If you have young children and both parents are deceased, the court will decide who should raise your children.

Trusts are used to protect assets, minimize taxes and safeguard assets for beneficiaries. There are many different types of trusts, and an experienced estate planning attorney will know which type is best for your family. For instance, if a family member is disabled, you may need a Special Needs Trust. Your estate planning attorney will also discuss whether you need a Revocable or Irrevocable Trust.

Trusts are used to shield assets from creditors and may be part of Medicaid planning. Another benefit is that assets in a trust don’t go through the probate process. If you are concerned about disgruntled family members poring over your will—which becomes a public document after it is entered into probate—you may wish to use a trust to keep your estate and your assets private.

Planning for incapacity is an integral part of an estate plan. Suppose you become incapacitated without any estate planning. In that case, your family will need to go to court to be able to speak with your doctors, talk with the health insurance company and take part in your healthcare decision-making. Court proceedings are costly and take time; they are not something you want to be embroiled in during a health emergency.

Your estate plan should include a Power of Attorney, which names another person to act on your behalf if you are incapacitated. You’ll also want a Healthcare Proxy to permit another person to make medical decisions on your behalf. An Advanced Directive will express your wishes for what kind of care you want if you can’t communicate your wishes.

Having an estate plan expresses your wishes for more than your property distribution. If you don’t have an estate plan, contact an estate planning attorney to discuss your intentions for assets, beneficiaries and your future. Most people are surprised at how relieved they feel once this task is taken care of. The peace of mind knowing you and your family are protected is well worth the effort.

Reference: The Daily News (Jan. 30, 2025) “What to know about estate planning”