Why should young adults consider estate planning? It can seem like a huge accomplishment to turn eighteen and graduate from high school, and it is! Many young individuals are planning their next moves in life or are leaving for college. It’s an exciting and hopeful time, but there may also be some anxiety. You are independent and responsible for your financial decisions, education, and decisions. As a young adult, proactive estate planning is essential, even though it may seem premature to begin considering matters like wills and trusts. In actuality, middle-aged Americans are less likely than adults between 18 and 34 to have a will.
It is not necessary to be wealthy or elderly to think about estate planning. It comes down to choosing what you desire to happen to your assets when you pass away and ensuring that your loved ones, friends, or a court aren’t left to decide what they believe you would have desired.
This blog content will tackle why young adults should consider estate planning. If you need help with your estate plans, give our estate planning attorney in Las Vegas a call right now for guidance and implementation of effective estate planning counsel.
What Is the Appropriate Age to Think About Creating an Estate Plan?
Since they are now considered adults by the law, and parents do not make their financial or health care decisions, individuals as young as 18 can prepare an estate plan. Certainly, you ought to have a strategy in place by the time you’re in your 20s and 30s.
You need an estate plan to divide your assets and designate the person who makes choices on your behalf if you move out of your parents’ house, get married, purchase a property, or have children. Since most young individuals have few assets, starting early simplifies the procedure. It is a fantastic chance to start creating a plan that you can expand upon and change as life becomes more complicated.
Why Should Young Adults Consider Estate Planning?
A young adult might want to think about making an estate plan for several reasons:
- You can ensure that the assets are given to your partner if you live together or own a house together but are not married.
- If you pass away or cannot act for yourself, you can give someone you trust powers of attorney.
- You could be unaware of how many assets you own, such as jewelry, a car, or family heirlooms.
- If you have children, you should begin making plans to ensure they have financial security and appoint a guardian for them in the future. If you fail to formalize your preferences in writing, the court will determine guardianship, and that person may not share your parenting style or values. (This also applies to your pets!)
- Establishing a living trust will spare your family and heirs from the stress (and expense) of dealing with probate if you have assets.
Benefits of Estate Planning for Young Adults
Estate planning is often associated with older individuals with substantial assets and property. However, young adults can also benefit significantly from estate planning.
Some key advantages of estate planning for young adults:
- Asset Protection: Even if you don’t have significant assets now, estate planning can help protect what you do have. It ensures that your belongings are distributed according to your wishes rather than subject to state laws.
- Guardianship for Minor Children: If you have children, estate planning allows you to designate a guardian for them in case something happens to you and your partner. That ensures their well-being and provides peace of mind.
- Healthcare Directives: Estate planning includes the creation of a healthcare directive or living will, which outlines your medical treatment preferences if you cannot make decisions for yourself. This document can alleviate family stress and confusion during difficult times.
- Financial Planning: Estate planning involves setting up financial instruments like trusts, which can provide for your loved ones in the event of your passing. It can also help minimize taxes and avoid lengthy probate processes.
- Avoiding Intestacy Laws: Without an estate plan, state laws determine how your assets are distributed. That may not align with your wishes, leading to disputes among family members.
- Beneficiary Designations: Estate planning allows you to specify beneficiaries for your life insurance policies, retirement accounts, and other assets. It ensures that your assets go to the right people, even if you pass away young.
Young adults can benefit immensely from creating an estate plan. Starting early with estate planning is a responsible and proactive step toward securing your financial future and legacy.
If you need a Las Vegas estate planning attorney to guide you throughout the process, The Law Office of Roger A. Giuliani, P.C. is here for you.
What are some common assets that young adults should consider when estate planning?
While your assets and circumstances may be different from those of older individuals, there are still several essential assets and considerations that young adults should include in their estate planning:
- Financial Accounts: This includes checking accounts, savings accounts, and investment accounts like stocks, bonds, and retirement accounts (e.g., 401(k)s and IRAs). Ensure you have designated beneficiaries for these accounts to avoid the probate process.
- Real Estate: If you own a home, condo, or any other real estate property, decide how to distribute it. You can specify your wishes using a will, trust, or other planning tools.
- Personal Property: Your personal belongings, such as jewelry, electronics, vehicles, and furniture, should be addressed in your estate plan. Specify who should receive these items.
- Life Insurance: If you have life insurance policies, ensure you’ve named beneficiaries and consider whether the payout is sufficient to cover your debts and provide for your loved ones.
- Healthcare Documents: Create a healthcare proxy (or medical power of attorney) and a living will to specify your medical treatment preferences if you cannot make decisions.
- Durable Power of Attorney: Designate someone you trust to handle your financial and legal affairs if incapacitated.
Estate planning may seem daunting, but it’s a responsible and caring way to protect your assets, provide for your loved ones, and ensure your wishes are followed. Consult an estate planning attorney to help you create a comprehensive plan tailored to your unique situation.
What Should Your Estate Plan Contain When You’re Young?
Most young individuals do not require a complex estate plan. These are some vital features that can be crucial to incorporate early on.
People of all ages must assign power of attorney authority to a reliable friend or relative. This legal responsibility allows that individual the power to act on your behalf should you be unable to make decisions for yourself due to physical or mental limitations.
A power of attorney is helpful for young people when they need to get a bill for college, sign a check to cover a significant payment, handle an inheritance, get the right insurance, file taxes, or even pay for veterinary care.
A durable medical power of attorney, commonly known as a health care proxy, gives the person of your choosing the authority to make crucial decisions regarding your health on your behalf. Conflicts between family members may arise, and the “wrong” person may be making decisions about the young adult’s medical care if the health care proxy paperwork is not in place.
Choosing a beneficiary for every bank account you open, including savings, checking, investing, and retirement accounts, is crucial. A beneficiary represents the individual you designate to inherit the account’s assets in the event of your death. Going the extra mile may prevent uncertainty and guarantee that your assets are distributed to the people you want them to, without going through the sometimes drawn-out and expensive probate court process.
Your last will and testament is another essential estate planning document for any age. It’s a legal document that specifies how you want your money, investments, and real estate (such as your automobile) to be allocated after your death. Even for young adults, a will enables crucial decisions, such as designating an executor to manage the many aspects of an estate administration, including what to do with those digital assets after death.
A will’s residuary clause, which includes any assets acquired after death, is a crucial document for young individuals to include. One never knows when this might become relevant, particularly for young individuals designated beneficiaries in other family members’ wills and trusts. We want the young adult to make a will that could consider this possibility since those other family members might need help to amend their wills or trusts that identify the young adult as the beneficiary, or they might choose not to do so.
What are some common estate planning mistakes that young adults make?
Some common estate planning mistakes that young adults should be aware of and avoid:
- Procrastination: Many young adults put off estate planning because they believe they are too young or don’t have enough assets. However, accidents and unexpected life events can happen at any age, so it’s essential to have a plan in place.
- No Will or Trust: Failing to create a will or trust is a significant mistake. These documents are necessary for the state to decide how your assets are distributed, which may not align with your wishes.
- Ignoring Beneficiary Designations: Forgetting to update beneficiary designations on life insurance policies, retirement accounts, and bank accounts can lead to unintended consequences if circumstances change.
- Not Having a Healthcare Directive: A healthcare directive, including a living will and a healthcare power of attorney, is essential for specifying your medical preferences and appointing someone to make medical decisions on your behalf if you cannot.
- Not Hiring an Attorney: Attempting to navigate the complexities of estate planning without professional guidance can lead to errors and omissions that may only be discovered once it’s too late. An experienced estate planning attorney in Las Vegas, NV, can ensure that your plan is legally sound and tailored to your needs.
Young adults should take the time to create a comprehensive estate plan to protect their assets, provide for loved ones, and ensure their wishes are respected.
Avoiding these common mistakes can help you establish a solid foundation for your future financial and personal well-being.
Get Professional Legal Help You Need
Secure your future with confidence! Whether you’re a young adult starting or navigating complex situations, our attorneys are here to provide you with the professional legal help you need for estate planning.
Don’t leave your financial and personal matters to chance. Let The Law Office of Roger A. Giuliani, P.C. guide you through the essential estate planning documents, offer valuable advice tailored to your unique circumstances, and ensure you’re prepared for life’s unexpected twists.
If you have questions or want more information, call us at (702) 388-9800.