Let’s say you are a single, young professional with a promising career. Ambitious, talented and finally getting financial affairs in order. Your student loans are slowly being chipped away and it is time to begin saving for a down payment on a house. You have a solid credit report with a few minor infractions but nothing that will have a lasting impact. Is it too early to begin thinking about estate planning? The simple and responsible answer is no.
What happens when you die?
Ok, so maybe it’s not as metaphysical as it sounds, but being prepared financially is extremely important no matter your age or station in life. Now assuming that you are single and are not connected to anyone else financially, the process is much easier. Complications arise when spouses, joint assets and children are introduced into the equation. It is now that you will want to consider a will, before all of those other things become an issue. The groundwork will be established for future revisions.
Now, at this point, if you were to die and you have federal student loans, the loans would be forgiven. This does not mean that it is clear; however, there are tax obligations that arise from forgiven federal student loans. Private student loans are a different story. With private student debt, the company will attempt to collect from the decedent’s estate. A will is the best way to protect your assets in the event that you do pass away. The next blog will discuss the issues that arise in community property states, such as Washington. So, call Bellevue’s estate planning professionals at Lyons|Sullivan today.