How to Plan Your Estate as a Young Adult
Sometimes younger adults don’t believe they need an estate plan or think they don’t need one yet. But estate planning benefits adults in all stages of life, and getting started on it earlier may save you time and prevent difficulties if certain situations occur. It’s also helpful to understand that estate planning for young adults encompasses more than just making a will – you may want to set up a trust, create an advance directive, or assign a power of attorney. In this article, we’ll talk about the reasons to begin planning your estate now and frequently asked questions about several aspects of planning.
When you’re ready to begin planning your estate, the Van Dyck Law Group can help with future planning needs, including wills, trusts, and long-term care plans. We’re always here for a consultation, so please contact us if you have any questions or concerns about planning your estate.
Why Should a Younger Person Think About an Estate Plan?
You may think of estate planning as something your parents or grandparents did as they grew older and wanted to put their affairs in order. However, even if you’re young and healthy, you never know what tomorrow may bring. Sometimes younger adults die or become incapacitated as the result of sudden accidents. In fact, adults between the ages of 25 and 44 are the most likely to die in a car accident, followed by people ages 15 to 24. What would happen if you were seriously hurt in a car accident tomorrow and unable to make your own decisions? This is only one of the complicated legal questions that might arise if you suffer any serious injury or worse.
An estate plan can also help you protect your assets while you’re alive in some cases. For example, in some situations, you might benefit from placing assets in a revocable trust, which can be dissolved while you’re still alive, returning the assets to you.
Why is Estate Planning for Young Families So Important?
Regardless of your age, if you have minor children, estate planning is essential to ensure they will be taken care of should anything happen to you. First, you will need to consider a financial plan for their care if you and their other parent are both deceased or incapacitated. How you go about this may depend on your financial situation and assets. In some cases, your estate planning attorney may suggest putting some of your assets into a revocable trust for the children. When you choose this option, you can set yourself as the trustee and manage the money in the fund as you think best, using it to pay for your kids’ schooling and other needs. If you pass on, you can also choose a successor trustee to manage the trust.
However, this is not an ideal solution for every situation. If you don’t have significant assets to place in a trust, your lawyer may ask if you have a life insurance policy or another way to provide financial security if you die or can no longer work due to disability. As you continue to work and grow your financial future, you may later revisit the idea of setting up a trust.
Aside from the issue of financial support for your kids, you and your spouse, or the children’s other parent if they are co-parenting with you, should think about guardianship. Selecting a guardian allows you to decide who will take physical custody of your children if they die or become incapacitated before adulthood. Of course, no one wants to think about dying while their children are still young, and hopefully, this part of your estate plan will never need to be executed. But if you don’t choose a guardian and an unfortunate accident happens, the court may appoint your children’s guardian. By selecting someone yourself, you can give the court an easy solution that involves someone you trust to take good care of your kids.
Be sure to ask the chosen person if they’re comfortable accepting that role. In some cases, they may not have the time, energy, or ability to parent a child or to parent another child in addition to their own. If this is the case, you will have the opportunity to choose someone else you trust.
Do I Need an Advance Directive or a Power of Attorney?
Everyone should have an advance directive for healthcare decisions in the event that they are incapacitated and unable to make their own medical choices. This directive allows you to choose a person to make healthcare decisions for you if you can’t. If you don’t have an advance directive, these decisions will likely be left to your spouse, if you have one, or to the closest relative the hospital can track down. Some people worry that a relative might not make the same choices they would, while others simply don’t want to burden their spouse with difficult decisions. By creating an advance directive, you can choose who will be handling your healthcare, and you may also include instructions for what kind of care you do or don’t want.
A financial power of attorney allows another person to make decisions about your money and assets while you are incapacitated. There are different kinds of power of attorney documents, and your estate planning lawyer can help explain the options. A durable power of attorney would let the person you select legally act for you in situations where you can’t be present (such as voting in a board meeting). If you have any significant assets to manage or own a business or property, it’s a good idea to choose a power of attorney so things can continue to run smoothly if you’re unable to make decisions.
When you’re ready to learn more about estate planning or start the process, please contact Van Dyck Law Group for a consultation at 609-580-1044. We will address any questions or concerns you have, and as soon as you’re ready to move forward, we’ll prepare all the necessary documents.