When most people hear the term “estate planning,” they tend to think about elderly individuals sitting down and drafting a will. However, estate planning involves many more important documents in addition to creating a will, and many aspects of estate planning are relevant to younger people as well. While you may assume that you don’t need to think about your estate plan until you are retired or even older, it’s time to take a look at why it’s important for people as young as 20 to start planning for their future. In fact, the sooner you begin working on your estate plan, the more protections you are putting in place to safeguard you and your loved ones in the future.
Starting With the Basics
Many people, especially those under 50, assume that an estate plan is only necessary for older people or for those with substantial financial assets. While a will is an important aspect of your estate planning portfolio, there are other documents that are more relevant for younger individuals to put in place sooner rather than later. For instance, one of the best actions you can take in your 20s and 30s is to establish a durable power of attorney and to appoint a healthcare proxy. Should the unexpected happen to you, these trusted individuals will step in to make critical financial and/or medical treatment decisions on your behalf. In cases where a young person suffers a tragic accident that renders them incapacitated and unable to make decisions, those who have already established a heathcare proxy or durable power of attorney tend to be more protected than those who haven’t yet created an estate plan.
Planning for Beneficiaries
If you are still in your 20s and single, you may wonder why you should even bother to create an estate plan yet. In many cases, though, your new job will provide you with benefits, such as life insurance coverage or a 401(k) plan. Both of these benefits ask you to designate a beneficiary, should the unthinkable happen to you. Remember, a beneficiary does not need to be a spouse or a child—it could be a sibling, parent, or other loved one. Of course, once you get married or have your first child, you should meet with your estate planning attorney to make sure you update your estate planning documents to ensure your newly added family members are protected as well.
Where to Begin
With the wide availability of online estate planning tools, you may assume that it’s easy to click a few buttons and trust that you’ve created a valid estate plan. However, many of these online resources are too generic and often fail to address and protect your specific needs. Instead, it’s best to meet with an experienced estate planning lawyer to discuss your options, even if you think you are too young to start planning for your future. Your attorney will help you understand how to create a comprehensive estate plan that is customized to grow and adjist with you as time goes on.