Young adults should have an estate plan in place.
When you think of estate planning, what comes to mind?
Do you envision a couple well into their retirement years deciding who they want to inherit their assets?
Perhaps you think of Prince or other celebrities known for their long estate battles?
If yes, your first thought aligns with what most Americans envision.
Unfortunately, these stereotypes give young adults a dangerously wrong idea about estate planning.
Individuals in their 20s and 30s often mistakenly believe they do not need to worry about creating an estate plan for several decades.
Young adults are not immune from tragedy.
Estate planning encompasses more than passing generational wealth to children and grandchildren.
Those with only modest assets still need a plan to protect this property from unexpected circumstances like incapacity through illness or accident.
Young adults should designate agents to make decisions in the event of incapacity, should choose people to inherit their property, and should select guardians if they have minor children.
Whether deciding who will inherit your belongings, who will make decisions on your behalf if you cannot, or who will take care of your children, an estate plan gives you peace of mind.
A durable power of attorney is used to grant authority to someone to make financial decisions in your stead should you be incapacitated.
What sort of responsibilities would this individual have?
Your power of attorney agent (known as an attorney in fact) will be responsible for paying bills and taxes, managing finances, and overseeing investments.
Because this role carries significant responsibility and financial access, you should choose someone you trust.
Practically speaking, health care directives are synonymous with living wills.
You should appoint an agent to make medical decisions when you cannot.
By the way, young adults are not immune from devastating illnesses or tragic accidents.
In fact, they are more likely to be impulsive than older individuals.
[Very rarely will you see a senior citizen starring in a "hold my beer" video online.]
Your health care directives should outline wishes for medical treatments, end-of-life care, and organ donation.
Having these decisions made and communicated in advance can reduce the stress and anxiety your loved ones will feel if they must navigate medical decisions for you.
While some young adults stick with "fur babies," others jump into parenthood.
Nominating a guardian in a last will and testament is essential for those with minor children.
By nominating a guardian, you select the person responsible for caring for your children in accordance with your wishes and values should you leave them orphaned.
Although probate often has a bad reputation, it is simply the legal process of settling an estate through the local court.
Depending on the complexity of your estate and your family dynamics, probate can be long and expensive.
With proper estate planning, you can simplify probate or avoid it altogether to prevent unnecessary stress for your loved ones and executor.
While many people think of life insurance as a means of providing an inheritance, it is a tool with multiple functions in estate planning.
It can provide greater financial security for loved ones left behind when you die by providing immediate income as the rest of your estate gets settled.
Life insurance can also be used to pay for funeral expenses, cover debts, and provide for the future needs of your family.
Your children are dependent on you for their financial and emotional needs.
By naming a guardian, you can ensure they are cared for by someone who loves them rather than a stranger.
Additionally, you can provide financial support for educational and other needs by creating educational funds or setting up a trust for their benefit.
Young adults face a variety of stressors in life.
Although creating an estate plan may seem like one more worry, taking action can provide peace of mind.
To create a comprehensive estate plan, you should have a last will and testament, health care directives, and a durable power of attorney.
A last will is necessary to nominate guardians for minor children and provide inheritance instructions for probate.
If you have pets, you can even designate new owners for them should you die.
Those who die without a last will leave major decisions up to the probate judge.
Although estate planning can appear daunting and complicated, working with an experienced attorney can help you feel confident in your plan.
The attorney will be able to provide guidance and create a plan tailored to meet your needs and the legal requirements of your state of residence.
For young adults, it is never too early to begin estate planning.
Those with minor children should appoint guardians and purchase life insurance to provide financial security for their loved ones.
Durable powers of attorney and health care directives are essential to incapacity planning.
Working with an experienced estate planning attorney licensed in your state of residence, whether in Kansas or Missouri, is essential to addressing your state's specific laws.
Because life brings changes, you should review your plan every few years or after major life events.
This post is for informational purposes only and does not provide legal advice. You should contact an attorney for advice concerning any particular issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.
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