Estate Planning: Not Just for the Elderly, Rich, and Famous
When people think about estate planning, they often picture retirees or high-net-worth individuals who need to plan for multigenerational wealth transfers. However, estate planning is just as important when you’re young. Whether just starting your career, building wealth, or growing a family, having an estate plan in place ensures that your wishes are carried out and your loved ones are protected. Below are some helpful tips to keep in mind when it comes to estate planning:
1. Draft a Will and Make Beneficiary Designations
Many people assume they don’t need a will because they don’t have significant assets. After all, if there’s nothing tangible to inherit, what does it matter how your estate is managed? However, having a will isn’t just for the rich — it also dictates who will handle your affairs and ensures the assets you do have go to the people you choose. Even more critically, many financial accounts, such as retirement plans and life insurance policies, allow you to name beneficiaries. If you fail to designate (or update) beneficiaries, your assets could end up in probate and go to someone you didn’t intend. Engaging an experienced estate planning attorney can help you identify which of your assets and accounts require beneficiary designations.
2. Prepare Powers of Attorney & Healthcare Directives
We often think of powers of attorney, living wills, and healthcare proxies as documents you complete before a major medical procedure or if you have a chronic illness. Of course, unexpected illness or injury are just as likely to leave you unable to make decisions for yourself and it is important to plan for this contingency. Without a power of attorney (POA) or healthcare directive in place, your loved ones may struggle to make financial and medical decisions on your behalf. A POA allows someone you trust to handle your finances, while a living will and healthcare proxy specify your medical preferences and designate someone to make decisions if you’re incapacitated.
3. Plan to Protect Digital & Intellectual Property
Young people, paradoxically, often overlook the importance of planning for digital assets. From cryptocurrency and online banking to social media accounts and creative work, our digital footprints hold both financial and sentimental value. Without a clear plan, accessing and managing these assets after your passing can be a legal nightmare for your family and/loved ones; imagine a spouse needing to file suit in Surrogate’s Court to access or deactivate your accounts, or a parent or sibling accessing sensitive content you only intended to be seen by your partner. Consider including specific instructions in your estate plan for handling your digital presence.
4. Plan for Student Loan Debt
Many young professionals carry student loans, but not all loans are treated the same in death. Federal student loans are typically discharged upon the borrower’s death, but private student loans may not be. Some private lenders hold co-signers responsible for the remaining balance. Reviewing your loan terms and considering life insurance to cover outstanding debt can prevent financial burdens on your loved ones.
5. Get Started While Young
Estate planning isn’t just for older adults. Life is unpredictable, and having a plan in place ensures that your loved ones aren’t left navigating legal and financial uncertainty. Even a simple estate plan—including a will, POA, healthcare directive, and beneficiary designations—can provide crucial protection and peace of mind in an emergency. When your life gets more complicated with kids, a home, or you found a successful business, it’s better to start from a strong foundation than nothing.
Conclusion
Young people have a lot to gain from proactive estate planning. By addressing fundamental issues now, you can protect your assets, provide clarity for your loved ones, and avoid unnecessary legal complications down the road. If you’re unsure where to start, consider consulting an estate planning attorney who can help tailor a plan to your unique needs and goals.