Estate planning often feels like something you can put off until retirement, and you’re not alone in thinking that. According to a caring.com survey, only 36% of adults with minor children even have a plan. In a busy world of building careers and juggling responsibilities, procrastination is easy. However, what many young people and their families don’t realize is that estate planning for young adults is just as vital as it is for someone nearing retirement. As soon as someone turns 18 years old, they are considered an adult in the eyes of the law, and that’s when parents lose many of the rights they had in making medical and financial decisions. This shift makes having a basic estate plan an immediate necessity.
1. The Essentials: Health Care Proxy & Durable Power of Attorney
Since parents can no longer help out, it is imperative that young adults sign a Health Care Proxy to outline their health care wishes and designate a Durable Power of Attorney to manage financial decisions, should assistance be needed.
2. Protecting Your Assets (Yes, You Have Them!)
Young adults often don’t realize the value in their estate given high debt loads. However, real estate, cars, jewelry and family heirlooms all have value, and it’s important that these assets are distributed to whom and how you want them. Many young adults are marrying later in life but may still be sharing homes and other assets with significant others. Creating an estate plan can help make sure that an unmarried partner may continue to live in their home, even if it isn’t in their name.
3. Crucial: Digital Estate Planning for Young Adults
In an age where young people use the internet for anything and everything, it’s important for families to know where all your digital assets are. Treasured photos that might only exist on a laptop and social media accounts are only scratching the surface of digital assets today. Adding a Digital Executor to your estate will help make sure loved ones are given access to a person’s digital information.
4. Naming Guardians for Your Children
The moment a child is born, an estate plan becomes imperative. By creating a will and naming guardians for your children you are ensuring they will be in the hands of someone you trust if anything were to happen. Don’t leave the difficult decision of who will care for your children in the hands of a judge who has never met you! The Heritage Law Center goes even further with our Child Protection Plan, which names temporary and longterm guardians and gives detailed instructions to stake holders.
5. Don’t Forget Fido: Planning for Your Pets
For families with or without children, planning for pets is another important consideration. Even if you bestow guardianship of your pet to a family member or friend, that still doesn’t mean the new guardian has to care for the pet. Protect your pet by setting up a pet trust, and set aside money and greater accountability for your pet’s care.
6. Considering a Trust to Avoid Probate
Considering whether a trust is for you is an important step in making an estate plan. Preventing your heirs from spending a year in probate court and helping them get access to assets the moment they need it is one of the many benefits of setting up a trust. If you have children and a home, trust planning is an important consideration.
7. Protect Against Debt: Life Insurance for Young Adults
Student loans are a huge source of debt for many young adults and often take decades to fully pay off. While federal loans are forgiven if the borrower dies, some private student loans are less generous and may even accelerate the debt after death. Buying life insurance at a young age can be very affordable and one of the best things you can do to prevent family from being burdened with student loans if the unexpected happens.
Take Action for Peace of Mind
Perhaps a meeting with an estate lawyer isn’t the most exciting high school graduation, housewarming or baby shower gift, but being prepared and achieving peace of mind is something that your loved ones will appreciate for years to come.