Estate Planning In Early Adulthood

Written By Tina Martin

When you’re in your 20s or 30s, and especially if you don’t have children, estate planning might not seem like an actual need. But the truth is it’s never too early to start looking ahead for your future and that of the family you may have. And although your studio apartment and meager savings may not need protecting, it’s crucial that you remember you’re not now where you’ll be 10 years down the road.

What Can I Do?

There are many ways to begin your estate planning journey. As a young adult, the steps you take now can lay a solid foundation for your life ahead. A few things to do include:

• Write a will. Even if you don’t have a lot of assets right now, creating a will that you update over time is much simpler than putting one together quickly if you’re facing a medical emergency. A will is an important tool in not only ensuring your belongings are distributed according to your wishes but also in protecting your loved ones from legal hassles. For example, if you own a home without designating who you’re passing it on to, a probate court will appoint it to someone who will be responsible for selling it in an estate sale, which can be a long and emotional process for a loved one.

• Establish a healthcare power of attorney. A health care power of attorney gives someone that you trust the power to make medical decisions on your behalf in case you become unable to do so. For example, if you have a motorcycle accident and sustain extensive brain damage, you’ll need someone to make decisions for your care. Your trusted person, which Find Law explains is your agent, would make end-of-life decisions, such as whether you remain ventilated if your brain could no longer support your physiologic functions.

• Invest in burial insurance. Although the above scenario is unsettling, so too is the thought of leaving your loved ones to foot the bill for your funeral if you died unexpectedly. Even if you don’t have a family to support, burial insurance can help you cover the average $7,000-plus funeral in the United States. Similar to life insurance, burial insurance provides a cash payout to your loved ones, the money to be used mostly for them to say their final farewells.

• Set up a trust fund. If the words “trust fund” conjure up visions of the insanely wealthy looking for a way to protect their assets, you’re right. But, you can open a trust with very little money, and it might not be a bad idea if you’re on track for financial success. According to the Motley Fool, there are many different types of trusts, and you can set money aside for everything from charitable organizations to future grandchildren. If you go this route, make sure to work with an attorney, particularly if you’re forward-thinking and want to plan for unborn potential beneficiaries.

Money Today

While it is one thing to look ahead, part of planning your estate responsibly is knowing how to handle your finances now. This starts by evaluating your current financial situation and identifying your immediate needs as well as likely future events, such as a wedding or the birth of a child. The College Investor also asserts that you’ll need to be financially organized. This entails having legal documents – a will, life insurance policies, etc. – along with information about your assets readily available for your spouse, parents, or siblings.

A few tips on managing your money now are to:

• Make saving a priority as early as possible.
• Do not make big investments, such as buying a house or new vehicle, just because you can.
• Pay your debts on time or, preferably, early.
• Use credit cards for emergencies only.
• Partner with experts when making any financial decision. This might include a realtor, banker, or financial advisor.

Estate planning doesn’t have to consume a huge amount of your time, and you don’t have to have an impressive bank account to get started. Even if you’ve postponed your professional career and find yourself in your mid-30s with no savings and no real plan for the future, a few small actions now can help you find your way. And planning for what happens to you and your finances today can save an immeasurable amount of heartache on your family tomorrow.