People in their 20s often do not think that they need to worry about estate planning. They plan to live much longer, so they believe there will be time to get an estate plan later. However, you never know when tragedy can strike, so it is important that 20-somethings get estate plans.
Younger adults normally do not think anything bad will happen to them. They are “bullet-proof,” so to speak.
They do not seriously imagine that they could pass away at any time.
This leads many young adults to delay their estate planning until they are much older. Unfortunately, if a tragedy does happen, this leaves the estates of many young adults in a bad situation.
Recently, Financial Planningpublished a list of estate planning documents that younger adults should have in an article titled "5 Financial Documents Every 20-something Should Have."
The list includes:
- Advance Health Care Directives - If you are in an accident and become incapacitated, then you will want to have a Health Care Power of Attorney and Living Will. The first designates someone who can make health care decisions for you. The second sets out what life-sustaining practices doctors can employ if there is no hope that you will recover.
- Durable Power of Attorney - If you are incapacitated, this document will let someone else handle your finances.
- Will - If you want to have a say in who gets your property when you pass away, you need a will or trust.
- Beneficiary Designations - If you have life insurance or a retirement account, then you need to designate who will benefit from them if you pass away.
Do not make the mistake of thinking that you do not need an estate plan simply because you are young. Get one as soon as you can.
You can always change it later when circumstances change. And they will.
Reference: Financial Planning (December 4, 2014) "5 Financial Documents Every 20-something Should Have"