There are a lot of misconceptions out there about estate planning, especially since many people associate estate planning only with seniors and who gets what after you die. These misconceptions can actually keep young people from moving forward with their own planning. There are, in fact, valid reasons why everyone, no matter how young or old, should consider starting the estate planning process.
But why is estate planning so important?
Why everyone needs estate planning
The main reason is that if you don’t have an estate plan in place and are ever to become incapacitated in any way, you likely would want certain people in charge of your health and finances. How do you make these wishes known when you can no longer speak for yourself?
With estate planning, of course.
Your estate planning checklist
Every person’s situation is different, of course, but you may want to keep the following in mind:
- Take inventory: What do you own? Which assets do you wish to pass on to a particular friend or family member? Your car? Your condo? Your dog? What about those stocks your grandparents bought you when you were a baby? Every single asset you wish to protect from probate must be accounted for in your estate plan in order for it to go to the loved one you have intended it for.
- Create a durable power of attorney: These legal documents can be created for your property, health care and finances. If you become incapacitated in any way, the people you’ve appointed to make decisions on your behalf will have the full and legal power to do so.
- Name your beneficiaries: Remember that this list should be updated regularly as family members are born or pass away or marry into or divorce out of your family. Don’t forget to review beneficiaries on often-overlooked documents such as your 401(k) or your IRA.
- Password hint: Your heirs will need access to your email accounts, digital documents, and social media accounts. You may want to consider including passwords for relevant accounts.
Estate planning is a good idea for everyone, no matter their income or age. None of us can see into the future. But by taking the steps to do so, you can certainly plan for it to the best of your ability.