Estate planning is not only for the old and wealthy. Even the young and poor need to be thinking about how their money will be distributed in the event of a tragedy. It does not have anything to do with net worth. It has all to do with taking care of the people you love. You do not want your parents to have to go through the probate process for your five thousand dollar checking account. Young adults do not need to do anything complicated to plan their estate. They just need a few vital pieces of paperwork to make sure a tragic situation is not made worse.
Planning starts with choosing the decision-maker.
The term “estate planning” could be misleading since the process encompasses more than creating a will. It is also something you should start as soon as someone becomes an adult. Most parents are surprised they cannot make doctor appointments or dentist appointments once their child turns eighteen.
At the age of eighteen, a young adult’s number one priority is to name a durable power of attorney and a health care proxy. These people will then have the option to make health care and financial decisions in the event a person is incapacitated. The durable power of attorney will also be helpful for college students who might be studying abroad and need a parent to assist with taxes or other financial matters while they are gone.
You should think about beneficiaries and wills.
When a young adult has his or her first job, the next step in estate planning is to look over all beneficiaries. A first job might come with benefits such as a 401(k) plan and life insurance coverage. Young adults should be sure a beneficiary has been named on each account. The beneficiary is the person who will get the assets or life insurance death benefit after an account holder passes away.
For the next step, young adults should make a will. Without a will, the court will decide who gets an individual’s assets, as small as they may be. That can leave some loved ones without anything. For example, if you have a long-term romantic partner to whom you are not married to, that person will have very little legal rights to your assets unless you create a will.
Be intelligent about keeping costs down.
People in their twenties do not necessarily need to pay an attorney to get these documents prepared. With the rise of online information, you can achieve a solid starting point with a do it yourself.
But we advise caution when going the DIY route. We have seen some clients use online templates and overlook important issues because they did not understand all the nuances involved in their choices. Even the best template cannot bring the personalized guidance of an estate attorney or planning professional.
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Also not all online forms and templates are made equal. Rather than use the first free form that shows up in the internet search, we recommend using our services because we have a network of attorneys that can help you.
Do you need assistance with preparing an estate plan? Click here to contact the experts at Hunsberger Dunn LLP today!