Many younger adults make the mistake of thinking that estate planning is something that only matters when you’re older. As a result, they put off creating their estate plan for years, sometimes even decades, which puts them at risk of outcomes they don’t want. In fact, foregoing an estate plan for a significant time could be a disastrous move for you, your loved ones, and your estate.
Why estate planning as a young adult matters
As a young adult, it can feel like your whole life is ahead of you. But life can change in the blink of an eye. And when it does, you want to be protected. If you aren’t, then your future and your wealth can be jeopardized. Here’s why even as a young adult you should consider creating a sound estate plan:
- Specify who will care for your children: If you have children, then you need to think about what will happen to them if you and their other parent both pass away. Without a plan in place, maternal and paternal relatives can fight over custody of your children, destroying familial relationships and leaving your children caught in the middle of it all. This can be emotionally and psychologically damaging to your kids. Fortunately, you can avoid that by specifying in your estate plan who will ultimately care for your children if tragedy strikes.
- Indicate who will make medical and financial decisions: You might not anticipate it, but a medical condition or accident can take you by surprise, leaving you incapacitated and incapable of making decisions on your own. If you don’t have an estate plan in place that names someone to make those decisions for you, then someone you don’t know and don’t trust can take control of your medical treatment and your financial decisions. This individual’s direction could run contrary to your wishes.
- Address who will inherit your assets: Even if it feels like you don’t have a lot to leave behind, you probably have more assets than you think. This includes money in your bank account, personal possessions, and digital assets. Ensure you have a plan for how those assets will be distributed, otherwise it’ll be left to state law’s distribution process, which may not align with what you want for your assets and your loved ones.
- Provide your loved ones with direction: If you choose to create an estate plan, you can incorporate a letter of instruction. Although this isn’t a legal document, it can provide your loved ones with direction, as it can specify what assets you have, where your assets can be found, why you’re distributing assets the way that you are, and your wishes for your funeral and final arrangements. This can take a lot of stress off your loved ones’ shoulders.
There may be other advantages that the estate planning process can provide you. You simply have to know what it can and can’t do in your set of circumstances. So, now is a good time to more fully assess what you can get out of effective estate planning.
Do you have questions about estate planning?
A lot of people put off estate planning because they’re simply confused by the process. Don’t let your questions go unanswered. Instead, turn to someone who is familiar with the nuances of estate planning for answers, or seek out other resources that can provide you with the guidance you need. We hope that you find our website and our blog to be a good jumping off point as you start your estate planning endeavor.