When we’re young, we subconsciously believe nothing bad can happen to us. Death is far from our minds, and we have all the time in the world. Most young people also haven’t had the opportunity to accumulate many assets and aren’t particularly worried about who will get what they do have.
But life is full of unexpected surprises, some pleasant, others not so much. Estate planning is about being prepared for life’s curve balls.
Accidents happen
We learn from an early age that accidents can and will happen no matter how careful we are. Even when we take every precaution, we can’t always control the environment around us.
What if you were in an accident that left you incapacitated for several days? How would your bills get paid? Who can make medical decisions for you regarding life-extending treatments?
In a worst-case scenario, for example, you don’t recover from your accident, and you don’t want to be on life support. Do you want to donate your organs? Do you have any prized possessions you want to give to a special friend? What about your online presence? Does anyone know how to access your bank account? Do you want your social media accounts deleted? Maybe there’s an option to convert them to a memorial page.
Your estate plan is a set of legal documents that can address all of those questions. Your plan doesn’t need to be complex, but it should include the following:
- Power of attorney (POA): A POA allows you to designate someone to handle your financial affairs and pay your bills if you are incapacitated.
- Healthcare proxy: Your healthcare proxy can make sure your wishes for medical treatment, life-sustaining measures and organ donation are carried out according to your wishes.
- Will: Washington will determine the distribution of your assets if you die without a will. If you don’t have a spouse or children, everything will go to your parents. If they are no longer alive, your siblings will each receive an equal share. If you told your best friend they could have your acoustic guitar, it’s important to know that a verbal declaration won’t hold up in court.
- Digital estate plan: You must outline how you want your digital assets (email, cloud storage, social media, banking and subscriptions) to be accessed and managed.
Getting started on an estate plan is easier when you’re young. You can review and update your plan as you go through life’s significant events, such as marriage, the addition of children or starting a business.
