Many people assume if they are young, healthy, or have few assets, they don’t need an estate plan. They wait to start estate planning until later in life, assuming they won’t need it sooner. However, this ignores key parts of the estate planning process that could make life more difficult for you and your loved ones.
Students Should Start Estate Planning At Age 18
Estate planning isn’t just about what happens to your assets after you die. It also includes directives about who is allowed to make decisions for you, address your financial needs, and receive information about your health and well-being. It is wise to start estate planning as soon as you, or your child, turns age 18, to make certain these decisions are in place before they are necessary.
College students and young adults get an added benefit from early estate planning. Their first priority should be to name a parent as durable power of attorney and health care proxy. That way, their parents can make doctor and dentist appointments for them while they are away at school, and help with financial decisions. A durable power of attorney can also help students who study abroad, by allowing their parents to handle their taxes and other financial affairs while they are away.
Early Estate Planning Saves Probate Headaches In Emergencies
Young adults don’t tend to think about the unexpected, but car accidents, sports injuries, and other medical emergencies can happen at any age. Without an estate plan in place, when a person is incapacitated by an injury his or her family members must go to probate court to have a guardian named before they can make decisions about that person’s care and treatment.
When emergencies happen, parents and loved ones need to be able to make decisions on the spot. Waiting even a day to be heard by a probate court judge could reduce an injured person’s chances of recovery and add to the strain on the family. By drafting durable powers of attorney and naming intended guardians and conservators in early estate planning, young adults can save their families those headaches and avoid the probate court.
Waiting To Start Estate Planning Could Cost Your Beneficiaries Money
As soon as you have a savings account, life insurance, 401(k) retirement account, or pension, you need to start thinking about your beneficiaries. These people will receive the money from those accounts, including life insurance death benefits, should something happen to you. If you wait to start estate planning, you could forget to name your beneficiaries, cutting them off from benefits they will need to pay for your funeral, burial, and final medical expenses.
As soon as you start thinking about beneficiaries, you should also create a will, if not a trust. You need to document your wishes for who should receive your property after you die, especially if you have a partner but haven’t married. Even if you do intend all your assets to go to your parents or other family members, a will can help streamline the estate administration process, ensuring that more of your money goes to your family, and less goes to court costs and attorney fees.
It is easy to procrastinate and wait too long to start estate planning. The truth is no one knows when they will need someone to make medical and financial decisions for them, or when they may need to have their affairs in order. Don’t wait until it is too late. Start estate planning early to protect yourself and the ones you love.