Do I need an estate plan if I am young and healthy?
While most of us have a basic understanding about what the term “estate planning” means, few young adults believe estate planning is something they need to worry about. After all, your twenties are a time for fun, adventure, and figuring out what you want to do in life. Despite the advantages of youth, however, tragedy can strike even the youngest and healthiest among us. Young people with few assets do not need an extensive estate plan, but they do need a few vital documents in place to protect their families and loved ones in the event of a sudden accident or illness. The following is a look at some estate planning steps that even young adults should complete.
Designating a Power of Attorney and Health Care Proxy
One of the most important things you can do once you turn 18 is to name a durable power of attorney and a health care proxy. These simple documents allow you to select an individual who has the power to make health care and financial decisions in the event you become incapacitated. Once you turn 18, your parents do not have automatic power to make these vital decisions, so it is crucial that you complete this relatively inexpensive estate planning step.
Name a Beneficiary and Create a Will
Once you secure your first job, you will likely receive benefits, such as a 401(k) plan and life insurance. You will need to name a beneficiary for each account. This named individual will receive the assets or insurance proceeds if you pass away. Now is also a great time to create your first will. Without a will, the court will distribute your assets in accordance with the law. Certain individuals you care about could be left out, such as long term romantic partners or close friends. Even if your assets are not plentiful, a will ensures that your property and belongings goes to the individual you select. It can further help to prevent any disagreements or feuds among loved ones after your death.
Andrew Byers is an estate planning attorney in Troy, Michigan.