Back to school season is upon us! As we all prepare to get back into our routines it’s also a great time to be reminded of estate planning basics. The blog posts this month focus on just that. Getting back to basics so you can make estate planning part of your fall planning.
Estate planning lends itself to procrastination. According to a caring.com survey only 36% of adults with minor children have any sort of estate plan. In a dizzying world of raising children, building a career and juggling all the responsibilities of modern life, pushing estate planning to the end of the list can be an easy thing to do. That often means that estate planning goes hand in hand with retirement planning. However, what many people don’t realize is that estate planning can be as beneficial for a young adult as it is for an adult on the brink of retirement.
As soon as a child turns 18 years old they are considered an adult in the eyes of the law. Many of the rights parents had in making medical and financial decisions for their minor children are no longer available. Not only that, but many major milestones frequently occur in young adulthood such as:
- going to college
- buying a house
- getting married
- getting a pet
- having children
These life events increase the importance of estate planning for younger adults, so consider the following while assessing your estate planning needs.
1. Health Care Proxy and 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. Protect Your Assets
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. Protect Your Digital Assets
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. Guardianship Over 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. Guardianship Over 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. Protect Your Family from Probate Court
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. Prevent Burdening Your Family with Student Loans and Other Debt
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.