Protect your Stuff (and your People) with Estate Planning
Whether it’s a sudden illness or an unforeseen accident, your life can change in a moment. While it can be uncomfortable to think about, these unexpected events can turn your future on its head, leaving you or your family scrambling. That’s why it’s important for everyone—young, old, and everything in between—to think about estate planning.
Estate planning is more than just writing a will. It includes making plans for how medical and financial decisions will be handled, as well as the more traditional questions of who will receive any of your assets. So whether you’re thinking about retirement or just starting on your career, you’ll benefit significantly from thoughtful, early planning.
The Importance of Estate Planning for Young Adults
While many people consider estate planning the province of retirees, seniors, and the very wealthy, it’s an important step for everyone to take, even young adults. If you’re in your 20s and 30s, you’re likely making some major life decisions such as buying a house, getting married, or starting a family. Drafting a plan will ensure your wishes are honored and minimize stress for loved ones during difficult times.
Start with a Will
The best-known piece of any estate plan is the will. At its simplest, a will is a legal document that lists your assets and what you would like done with them upon your death. It’s also a way to name a guardian for any of your dependents, including any pets you may have. If something happens to you and you haven’t made a will, the courts will make these decisions for you, which can be a lengthy process and may not result in the decisions you would prefer.
You can write your own will, but you’ll want to be sure to have a witness sign the document to ensure there aren’t any challenges down the road if a family member or business associate disagrees with your decisions. You can also have an attorney help you create your will, which will ensure that it complies with state laws and covers all the important information.
Beyond the Will: Essential Estate Planning Documents for Everyone
Creating a will is essential, but your estate plan should include several other pertinent documents to cover other eventualities. These include options to cover health care decisions, financial management, as well as end-of-life care, and will benefit
Beneficiary Designations on Retirement Accounts
Many employers offer retirement accounts, or you may choose to open one on your own. You’ll be asked to designate a beneficiary in the event that something happens to you. You can name a single person or multiple beneficiaries, depending on the account. You can also choose how much of the account goes to each beneficiary.
Naming a beneficiary is something you’ll want to revisit over time. Major life milestones like marriage, children, or starting a business may have an impact on who you choose to name. A college student starting their first job may have named a parent, but as your relationships change, you’ll likely to want to update that choice.
Durable Power of Attorney
You may have heard of power of attorney, which gives someone permission to make legal decisions on your behalf. A durable power of attorney is slightly different, allowing a designated individual to make decisions for you if you become incapacitated. While this document is vital if you are injured or have a medical emergency, you’ll want to choose your representative wisely, as it grants that person full access to your finances.
Health Care Proxy (Medical Power of Attorney)
Similarly, a health care proxy empowers someone you trust to make medical decisions for you if you are unable to make them for yourself. Anyone under the age of 18 generally relies on a parent or guardian for this role, but if you are 18 or older, you’ll want to designate a medical decision maker for yourself. This can be the same person you assign durable power of attorney, or it can be someone different.
As with the durable power of attorney, you’ll want to choose someone you trust, as this person has full legal right to make medical decisions on your behalf.
Protecting Your Digital Assets
Many young adults have an extensive online presence, from social media accounts to email addresses. Including provisions for your digital assets in your estate plan can ensure their proper management after you’re gone. You can designate someone you trust to manage your accounts on your behalf in your will.
Other Individual Considerations
Living wills and long-term care plans are additional components to consider in your estate planning. A living will documents what treatment you do and do not want at the end of your life, and a long-term care plan describes your preferences for options like assisted living facilities and nursing homes.
Trusts
For individuals with businesses, significant assets, or beneficiaries who are minors, a trust is a way to manage and protect your assets. Trusts ensure your assets are allocated according to your wishes, potentially easing the management burden for your dependents and providing for those you care about.
The Value of Expert Guidance in Estate Planning
Estate planning can be a complicated process. Consulting with a seasoned estate planning attorney can ensure your will and other documents accurately reflect your desires and comply with local laws. A financial advisor can also help you navigate your investment accounts, ensuring a holistic strategy for your estate plan that aligns with your needs and goals.
Estate Planning Influences Your Future
Estate planning enables people of all ages to take control of their future, making informed decisions that not only safeguard their interests but also protect their loved ones. With an estate plan in place, you can rest secure knowing your decisions will be honored and your family taken care of.
Protect Your Legacy Today
Don't wait to begin your estate plan. Whether it's starting with some simple research or scheduling a consultation with a professional, take that critical first step towards securing your future. Estate planning is not just an act of foresight, it's a profound gesture of care for both yourself and your loved ones.