Weary & Co – Estate Planning for Young Adults

Imagine you’re 24 years old, single and have no children and you’ve just purchased your first home. To help pay your mortgage, you are renting a couple rooms to friends.  Your parents have suggested that you should have a Will and a rental agreement with your friends, but since you are just getting started with your career and your roommates are your friends, you question if the documents are really necessary.

Why do you need estate planning documents and a rental agreement?  The simple answer is that someone must have the legal authority to step into your shoes and be able to handle your personal and financial affairs in the event you die or lose mental capacity.

The primary purpose of a Will for you would be to appoint an Executor.  An Executor’s authority begins at the moment of death. Meaning that your Executor could immediately deal with your mortgage company, bank accounts, home insurance, utility companies, your employer, and roommates. Without a Will, no one has authority to manage any part of your estate and none of these third parties will take instruction or provide any information to the person trying to manage your estate until a Grant of Administration has been obtained from the Courts: a process which takes months. In the meantime, your mortgage could go into default, your bills unpaid, your rental income not deposited and if your roommates ran amok there is no ability to evict them without a Court application.

The purpose of an Enduring Power of Attorney is to allow someone to step into your shoes in the event you lose mental capacity. Mental capacity can be lost at any age due to illness or 

injury. An Enduring Power of Attorney would give the person you’ve named the same authority as your Executor with respect to your financial affairs, but while you are alive. That person would be able to manage and make your financial decisions, including dealing with your roommates, depositing your rental income, filing your taxes and so on. 

Anytime someone has roommates or tenants, a rental agreement should be entered to set out in writing the obligations of each of the parties, even if these individuals are your friends. If you were to die or lose capacity, your Executor or person acting under your Enduring Power of Attorney would easily step into your shoes as their landlord.

A good estate plan includes, at minimum, three documents – a Will, an Enduring Power of Attorney and a Personal Directive. Without these documents no one has the authority to take any actions on your behalf.

Most people think of estate planning as something only retirees or seniors do. But the fact of the matter is that any adult over the age of 18 should have an estate plan in place.

Christine Maloney

Weary & Co

400 – 30 Green Grove Drive

wearyco.com

780 459 5596

This sponsored content was produced in partnership between Weary & Co and T8N Magazine