It’s not uncommon to think that estate planning doesn’t really apply to you when you’re in your twenties or thirties. After all, you’re still young and healthy, and you may not even own property yet or have much money to your name. However, the fact is that tomorrow isn’t a guarantee for anyone. Regardless of age, it’s in the best interests of everyone to have some end-of-life plans in place.
When you’re young, estate planning is more about taking care of your loved ones than the amount of your net worth. Should anything happen to you without an estate plan, your parents or spouse will have to go through the probate process for any assets you do have.
An estate plan will make things easier for your family and ensure they carry out your last wishes. Estate planning can seem intimidating, but your plan doesn’t have to be too intricate when you’re young. With a few vital estate planning documents, you can ensure you ready for anything life throws your way.
What every young adult’s estate plan should have
- A will: Having a will ensures that the court will distribute your assets to the individuals you want after you pass away. If you have children, a will also allows you to name a legal guardian for them in the event of your death.
- A durable power of attorney: If you should become sick, injured or incapacitated during your lifetime, a durable power of attorney is a document that allows someone to manage your financial and personal affairs if you can no longer do so yourself. Otherwise, your family member may have to petition the court to get permission to take over these responsibilities.
- A healthcare power of attorney: Like a durable power of attorney, a healthcare power of attorney allows an individual to make decisions on your behalf for your medical treatments and care if you can no longer make these decisions yourself.
- Beneficiary designations: Young adults need to review their beneficiary designations and ensure they are up to date every few years. Life insurance policies, retirement accounts such as a 401(k) or investment accounts are all a part of your estate.
Estate planning may not seem necessary when you’re young, but the reality is no one gets out of life alive. Planning your estate today will ensure your loved ones are taken care of no matter what tomorrow brings.
