College students are graduating and entering the workforce in droves. If you are one of those students, you should know a few key facts about your future. For example, did you know that someone who graduates with a degree in engineering with $150,000 has more money than someone who earns $150k as an entry-level MBA? As it turns out, there are many reasons why having an estate plan before you graduate from college is essential to ensure success on your journey.

You Don't Know How Much You'll Need

According to the U.S. Census Bureau, the median value of all American homes is $234,500 - and only 1% of Americans own a home worth more than $1 million. And that average value is an estimate - it can vary wildly depending on where you live. This means that you could leave your inheritance in a relative's house at home, which might not be enough money to sufficiently support your family throughout their lives (assuming they have kids). On the other hand, college students may need more than their inheritance, and you don't know.

Your Estate Plan Is Non-transferable

There are several states where the only way to pass the property on after death is through inheritance; however, there are also states where individuals can transfer their property to a trust during their lifetime.

In general, if you would like to pass your property on to your heirs, you must ensure that the property cannot be transferred away from the beneficiaries without your consent. If you are married, you may have separate trusts for each spouse.

Suppose you are not married when you die. In that case, your property can still be transferred to a trust during your lifetime, which means that if your estate is small enough, it will not qualify for the estate tax (the federal tax law that applies to estates valued at over $5.43 million for couples, or $10.98 million for a single person).

You Don't Know How to Manage It

The sad truth is that most students don't have the means or maturity necessary to manage their finances - at least not at the same skill levels, they'll need when starting a new job. That's why it's so important to have an estate plan before you graduate: you will have time (and more experience) to work on your financial management. College is not a good time to start managing your money - you should already know how to do it to focus on your education.

You Won't Have the Support to Save

It's nice when we're in college and wants to spend our money - but it's not always best for us in the long run. If you don't have any money saved, it will be difficult to build up anything that'll leave a meaningful inheritance for your family. So, college student, if you're already dreaming of big birthday parties when you graduate (or even your retirement party), it's time to start saving for that now. An estate plan can motivate you to do so and help you avoid the embarrassment of not having enough money in your bank account at the end of your course.

An Untimely Death Could Spell Doom

You can only go to them for so long before you have to take care of yourself. And no, living off their credit cards or their house isn't necessarily the best idea. An estate plan is yet another reason you should consider taking care of yourself - you shouldn't expect your parents to support you forever. It's time to start preparing for your future without them.

Life is short. And contrary to what you may think, life insurance can be a great investment for your future. Don't let your family be left with anything after you're gone due to an early death. You also have to think about the other end of the spectrum: you could live longer than expected and have no plan in place once that time comes. Furthermore, life insurance can help your family avoid selling the home you left, which would be a monumental burden on them in the short term.

The Bottom Line

It would be best if you started creating a plan before you entered the workforce. The sooner you start thinking about your future, the better you'll be at planning for it. And even if you don't think that estate planning is important to you now, it could be very important in the future - especially when you're moving up in your career and earning more money. Likewise, your parents should have an estate plan in place well before they retire so they can enjoy their retirement years. So please take action now, so you won't regret it later. Our estate planning experts at John Goetz Law PLC can get you started with a consultation today.