Darcy K. Houghton: Estate planning isn't just for old people

We often think of estate planning as something for "old" people. That is just not the case.

Just this past year, my colleagues and I watched several of our "younger" friends and clients lose their spouses. These weren't grandparents who had lived a good long life, these were young parents with young children. These families needed the parents love, encouragement and ... financial support.

These situations were tragic but not rare. These families were forced to grieve, not only for their lost one, but because they knew that their own lives were about to be thrown into financial upheaval. Nothing can take away the pain of losing a soulmate or parent, or even child support from an ex, but the blow can be softened.

The first step is to make sure proper income replacement insurance is in place. Both parents, whether working or not, or married or separated, should be well insured. If trust is an issue between the parents, trusts for insurance can protect the proceeds for the intended purpose. If income replacement is the desired goal for the insurance, "term insurance" should be sufficient. Do not purchase only "accidental death" insurance. If your loved one dies from cancer, with only accidental death coverage (as two of my friends have experienced), there will be no payment.

Purchase the insurance from a reputable company with a premium that is locked in for 10, 20, or 30 years, the amount of time between today and when the need for the income replacement is gone. Obtaining insurance this way is usually a much better bargain than just purchasing the excess insurance through work. The price may be a bit higher today, but will not rise with age, or be eliminated if a job change occurs at a time when you are uninsurable. Purchase enough insurance to allow loved ones to do the things that were part of the plan if everything went right. This may take some calculating, but it is amazing how the costs of life add up!

Once insurance is in place, obtain estate planning documents (yes, this is a good order of action, unless the insurance will be owned by a trust). Powers of attorney and a will are minimum requirements. Most often a trust works better than a will and is necessary if the family has many assets.

Us youngsters prefer to avoid our mortality, but, once we have families, it isn't just about us. As I have said time and time again, it's about the plan. Please take the time to plan for the unexpected and protect your loved ones!

• Darcy K. Houghton is a resident of Carson City and works in trust and wealth management with Whittier Trust and is Of Counsel to Houghton Jones (www.hou2plan.com).