Thinking about estate planning is often as far as many people get until an unplanned or traumatic situation occurs, at which point it’s challenging to assemble a mindful, organized, and sensible estate plan. Our recurring mantra is that it’s never too early, and you are never too young, to begin thinking about your estate plans.
Estate Plans Are About More Than Wills, Heirs, & Beneficiaries
When you’re young, thinking about wills, heirs, and beneficiaries may seem silly because death seems like a long way off and you may not have many assets to speak of. However, estate plans include more than just bequeaths and grants to your heirs and beneficiaries.
Your plans will also discuss who can make medical and legal decisions for you if you should be incapacitated – even temporarily (such as while unconscious in a hospital as a result of a car accident). Which medical procedures or treatments are used or not, where your child(ren) stays and with whom, how bills should be paid, etc., are out of your control unless you’ve planned ahead and put together some simple, legal documentation outlining your personal wishes.
So, if you are 18-years of age, and you don’t want your parent(s), spouse, or pushiest immediate family member making all of your decisions for you, we suggest taking baby steps to create your own estate plan, which can be revised again and again throughout your life as your life narrative unfolds.
4 Reasons Young Adults Should Think About Estate Planning
Here are four of the main reasons young adults, even those without significant assets, should take estate planning seriously.
Your medical and legal wishes are accurately represented
Without a legal Advance Medical/Healthcare Directive in-hand, doctors are far more apt to follow the directions of the loudest and pushiest family member when it comes to which medical procedures are taken, regardless of any verbal conversations you’ve had with partners, friends, your favorite sibling, etc.
A Healthcare Directive and a Power of Attorney are the first places to start when you are in your 20s, even if you have no assets to speak of. You are your greatest asset and your beliefs, values, and choices deserve to be upheld even when you are not able to speak for yourself. Completing your Healthcare Directive and giving copies to individuals you trust is the only way to ensure your wishes are honored if you are unconscious or unable to make decisions for yourself.
Similarly, a Power of Attorney is a document that gives trusted individual(s) the legal right to make legal and financial decisions for you when you are either out of the country or incapacitated. If you don’t complete this document and a POA is needed to handle your affairs, the courts will appoint a POA in your stead and, as with medical scenarios, it’s often the family member who willingly takes the helm that is appointed the decision-maker, regardless of whether s/he is who you would have chosen to make decisions in your stead.
Protect Your Loved Ones From Emotional Complications
Families fracture dramatically and quickly in the face of unexpected trauma when there is no plan in place. Heightened emotions and the love that binds families and friends together can make it impossible for those who love you most to honor your wishes, regardless of whether they promised you they would or not.
This fracture can be even more divisive if you never shared your wishes at all because in that case, decisions are being made in a stew of what people imagine you would have wanted, mixed together with what they want. Creating even a basic estate plan is the surest way to protect your family from the emotional divide and mess that often unfolds in the most sensitive and challenging of times.
Take Care of Your Children (and pets!)
If you have young children, your estate plan is one of the best gifts you can give them. It will outline who should raise them if you are unable to care for them. Again, most young people shy away from creating estate plans because they are uncomfortable thinking about death, they feel death is a long way away, or they don’t realize that estate plans are often activated as a result of a life trauma (car accident, non-fatal but serious injury or illness, etc.).
In the latter case, an estate plan gives some direction around how things should be handled, or who should handle them, for the time being. Your estate plan will highlight:
- Who your children should live with (and a backup plan in case something has shifted for the initial guardian choice)
- How their needs will be paid for (savings accounts, selling of property or other assets, etc.)
- Your intentions or wishes around them spending a certain amount of time with a step-parent or grandparents, etc., to help establish normalcy for them that may not exist without your input
You can also arrange for where beloved pets will go and grant the funds necessary to accommodate their needs.
Have Control Over Who Inherits What
Nobody enjoys dwelling on the reality of death, but it is a reality. We all hope to live long, healthy lives, but life experience proves that’s not the case for everyone. If you were to die suddenly or sooner than you would expect, you want to know your assets will be distributed to your heirs and beneficiaries as you see fit.
The first step along these lines is to assign specific beneficiaries to each of your financial accounts. Even if you don’t own properties or non-monetary assets, taking the time to go online can save your family a tremendous amount of stress down the road. Most financial institutions make it easy to assign a single beneficiary or multiple beneficiaries (dividing the total account by your chosen percentages per person). This may be all you need to do to ensure current assets are distributed according to your wishes.
If, however, you own real property, valuables, family heirlooms, collectibles, etc., and you have specific wishes for how they should be distributed, consult with an estate attorney to create a more thorough estate plan.
Let us help you plan for the future
The team here at Tseng Law Firm is happy to work with first-timers and will make it as simple as possible by taking you through a series of questions that will create an estate plan that reflects your values and wishes. Contact us online or call us directly, 510-835-3090, to set up a free consultation.