Estate planning is typically not a priority for people in their 20s, 30s or even 40s. Although the chances of dying are slim, it is still important to plan for the unknown and provide protection for assets.
Starting an estate plan for a young person does not have to be a complex process. For most people, just the basics are necessary and then they can make changes as life progresses.
According to Forbes, single people, especially, tend to put off estate planning. However, without a plan, any assets would go to closest relatives or the state. The most basic part of an estate plan is a will. This allows an individual to name beneficiaries for retirement accounts, property, jewelry, life insurance etc. Along with writing a will, the individual should also name an executor who will carry out the wishes of the will.
People who are young have a hard time thinking about having a serious injury or illness that results in the inability to make healthcare and financial decisions. Another important basic element of estate planning is to name financial and medical power of attorneys. These people will follow the individual’s directions when it comes to personal affairs and medical care.
Considerations for young parents
Getting married and having kids are two main life events that warrant a review and update of the estate plan. According to CNN Money, an individual will often change the beneficiary of most, if not all, assets to the spouse.
As parents, it is also important to name a guardian for the children in the event both parents die. A couple may also choose to set up a trust, which helps further protect assets.