Adults in their 20s and 30s tend to focus on building their careers and accumulating savings.
Once they attain stability, they may start to buy properties and make investments. Their lifestyles and priorities will also change as they get married and start a family of their own. While the future is promising for them, it is also uncertain and planning for the unexpected is just as important for the “young” as the “old.”
An estate plan provides several options to ensure that young adults establish a solid foundation for their wishes to be followed and their assets to be distributed to their chosen beneficiaries, should they, God forbid, pass away at a young age.
Below is a list of estate planning documents that should be considered:
Last will and testamentIn New York, those aged 18 and above who are “of sound mind” can make a will that takes effect upon death. It should detail how the individual wants to distribute assets like bank accounts, jewelry and real estate properties. The creator of the will can also appoint someone called an “executor” to carry out their wishes. If someone passes away without a will, all assets that are in their name alone without named beneficiaries go to their “heirs at law” known as “distributees.” A Last Will and Testament avoids assets going to someone who might be an “heir at law,” but who is not necessarily someone who the decedent would want to receive their assets.
Living trustAn estate plan can also have a living trust. This allows the creator of the trust to act as a trustee as well and manage their assets for their own benefit during their life. The benefit is that trusts are also private and any assets titled to the trust avoid the probate process and are not controlled by someone’s Last Will and Testament when the creator of the trust dies. In case of mental incapacity, a successor trustee can also be appointed by the creator of the trust to take over decision making tasks, which can be very helpful in the event of an unforeseen medical situation or diagnosis causing incapacity.
Powers of attorney and health proxiesAdvance directives are crucial inclusions in an estate plan. First, a power of attorney takes care of financial matters. A designated agent can pay bills, give money to your family and manage your funds.
Second, a health care proxy assigns someone to make medical decisions in case you become terminally ill or incapacitated. You can also include your wishes for end-of-life situations and medical emergencies.
Updating your estate plan oftenWhen young adults create an estate plan, it isn’t a done deal yet. Estate planning is an ongoing process that requires updating every few years or so. You may revisit and update your plan every one to five years.
Young adults also need to update their estate plans whenever they reach milestones. These include getting married, having a child, being promoted and acquiring new valuable assets.
Preparing for the unexpectedIt’s never too early for young adults to prepare for the unexpected. An estate plan may protect your assets in life and death. Further, it guarantees that the fruits of your labor will benefit you and your loved ones.
