What Young Adults Should Know About Estate Planning
Estate planning is a topic that was once reserved for discussions among an aging population, and those aged 18-34 are only 16% likely to have a will. Nowadays, it’s important for young adults to understand that executing a plan early in life can be beneficial in several ways.
Becoming a Legal Adult Restricts Certain Information
One of the most useful estate planning tools, once you turn 18 and become an adult by law, is an advance directive. When you sign this legal document, you can allow another person to access your medical information and make decisions on your behalf if you’re unable to do so.
For instance, if you were involved in a motor vehicle collision that resulted in incapacitation, it would be helpful to have an advance directive in place, thereby granting someone you trust the ability to make medical decisions on your behalf. You can also incorporate instructions regarding what type of care you want. An estate planning lawyer can explain such documents in detail, including ways to customize a plan to meet your specific needs and estate planning goals.
Protect Your Assets With a Financial Power of Attorney
Another important issue to consider as a young adult is finances. A financial power of attorney is similar to a medical directive, except that it grants another person authority to make financial decisions on your behalf rather than medical decisions.
There are several types of financial powers of attorney. Not only can you entrust financial decisions to another person if you become physically incapacitated, but you can also sign a durable power of attorney, which would enable someone to legally act on your behalf if you cannot be present in person to do so. An example of this would be if you were in the military serving overseas or traveling abroad as a private citizen when an important legal issue arises regarding a business you own that must be immediately addressed. If you can’t be there in person, a durable power of attorney enables someone else to act in your place.
Consider Signing a Revocable Trust
When a young adult works with an estate planning lawyer to execute a revocable trust, he or she is typically concerned with the protection of assets. Creating a trust is a way for you to assign a trustee to distribute the assets of the trust to beneficiaries of your choosing upon your death. Assets that you place in the trust may include valuable possessions, real estate, investments or cash. This type of trust is often referred to as a “living trust” for the simple reason that you create it during your lifetime.
By choosing a trust that is revocable rather than irrevocable, you become the grantor and may remove assets from the trust at any time, as well as change the instructions of the trust or even terminate it if you choose. It gives you much more flexibility than other types of trusts. A trust that is irrevocable, on the other hand, cannot be changed for any reason, and you may not remove assets that have been funded into the trust.
Reasons to Plan Your Estate Early in Life
The longer you wait to begin the estate planning process, the more daunting an endeavor it might be. Creating a plan early in life enables you to feel in control of numerous financial issues as well as various medical aspects and assets that you may want to protect and set aside for a specific person. If you’re a parent, you can alleviate concern by choosing a guardian for your minor children. While you can’t predict the future, you can avoid stress by taking the guesswork out of important personal matters and preparing as much as possible for the unexpected. You can periodically review your plan to check if any changes or updates are needed, such as if a marriage or birth takes place, prompting you to want to change a living will.
Many people avoid talking about estate planning because they dislike thinking about their own mortality. Rising above that discomfort can place you a step ahead by planning for the future and being in charge of important decisions that will otherwise be left to the court if you have no plan in place. Feeling like you’re prepared in case of emergency can give you peace of mind as well. You can request a meeting with our Hackensack, New Jersey, law firm by dialing (201) 996-1200 to learn more about the estate planning process and how to customize a plan to fit your specific needs and long-term goals.