What you should know about early estate planning
If you’re in your twenties or thirties, you may think that you have no need for an estate plan. This misconception is especially common among people who don’t have significant assets like a home. The truth is, there are many aspects of estate planning that you should consider before the age of 40, even if you don’t have children.
If you think you’re too young for an estate plan, you should know that estate plans aren’t only used for determining who gets your assets.
“These documents are not just for old people," states financial planner Lauren Locker in Kiplinger. "They are critical to your life planning and well-being.”
One of the most important parts of an estate plan involves outlining your medical wishes and ensuring that there are people to help carry them out and the documentation to allow those people to do so. Although you may be in great health now, this part of your estate plan is necessary in case you suffer an accident that leaves you incapacitated.
"My clients are usually surprised when I say, 'You know, if something happens to your child while they are in school, you don't have any right to their medical records,” states Melissa Langa, partner at Bove & Langa P.C. law firm. “They're adults. No one can see their records, and if they are unconscious or something like that, you don't have authorization.'”
For this reason, you should make sure that you have a basic estate plan that ensures that someone you trust will be able to make the decisions you would wish to make for yourself if you’re unable.
“To plan for the worst, experts recommend that everyone fill out and sign a health care directive or living will and designate a representative to make medical decisions with a health care proxy,” states Sheyna Steiner from Bankrate.com.
You should also consider life insurance as part of your early estate plan. This is especially true if you have student debt that a family member co-signed for. If you pass away, they may still be left to pay the debt, and life insurance can help with that burden.
Creating a will is another step that you should take before your forties. You can make one yourself online, but unless you’re familiar with the process, it’s probably best to talk to a lawyer to ensure that you’re on the right track.
“Without one, complete strangers will decide how to split up your estate and raise your children,” states Stacy Rapacon from Kiplinger. “Be sure to update these documents periodically to account for major events, such as the birth of a child.”
Fortunately, forming a basic estate plan isn’t difficult. When you complete these steps, you will be able to rest assured knowing that when your estate becomes more complicated in later years, you already have a good foundation to build upon.
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