Estate planning is often associated with retirement, but getting affairs in order earlier in life can ensure that an individual is prepared for life’s uncertainties. Regardless of how much a person is worth, they should begin the process of estate planning as soon as possible. Especially for those with young children, setting a financial plan in place can ensure that the kids are taken care of. Even for people who have little or no assets, a plan is critical since every dollar is important.
Before planning an estate, a person should discuss their wishes with their loved ones to make sure that everyone is clear on how assets should be divided and the reasons why. It’s also important to have life insurance, a will, a living will and a durable power of attorney in place to protect the family in the event of a premature death. For young people especially, life insurance is crucial since they likely have not yet had time to accumulate wealth.
After life insurance has been secured, a will should be drafted to spell out exactly how assets are to be distributed. It should outline what each beneficiary is to receive, who is to be responsible for managing financial affairs and who should take care of any minor children in the event of a parent’s death. A power of attorney should also be established in the event of a condition that leaves the individual unable to make medical and financial decisions for themselves.
Individuals should consult with a team of estate planning professionals to draft a will, living will, and durable power of attorney. These professionals can help create the necessary estate planning documents based on a person’s individual needs and circumstances, and can help revise them as necessary.
Source: US News, “Estate Planning Tips for People Under 40“, Sienna Kossman, September 19, 2013
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