When Should You Start Estate Planning? Why You Should Have An Estate Plan In Your 20s
When most people think about estate planning, it is easy to assume it is something that only applies to elderly adults, or perhaps those facing major health issues, when in reality, starting your estate planning process in your 20s can be one of the smartest decisions you make. While the typical approach is to wait until major life events force you to make an estate plan, it’s important to understand that creating your estate plan early in life gives you control and peace of mind for the years to come.
So, if you have been wondering when you should start estate planning, contact our team at Friedman Schuman Layser to learn why you should have an estate plan in your 20s.
Do I Need An Estate Plan In My 20s?
Estate planning isn’t just for the elderly or those with significant assets. If you’re in your 20s, you may already have assets like real estate, savings accounts, retirement accounts, a profitable business, etc., debt, or even family responsibilities that need to be considered. Planning ahead ensures that your wishes are carried out and that your loved ones won’t face unnecessary legal complications in the event that something happens to you.
Think of planning your estate early as a way to gain control over the unexpected. While it’s not fun to imagine worst-case scenarios and what will happen when you pass, the reality is that accidents, illnesses, and the unforeseen can happen at any time. Having an estate plan in place makes sure your assets, health care decisions, and family members are properly taken care of if you’re unable to make decisions yourself, regardless of your age.
What Documents Should My Estate Plan Include?
At a minimum, your estate plan should include a few key documents that will help to outline your wishes and help alleviate stress for your family should something happen to you. Here are the essentials to consider:
Durable Financial Power of Attorney
A Durable Power of Attorney (POA) designates someone you trust to manage your financial affairs if you are incapacitated. Without a POA, your loved ones would be required to go to court to manage your finances on your behalf, which is a time-consuming and expensive process.
Healthcare Power of Attorney
This document names someone to make medical decisions for you if you’re unable to do so yourself. In situations where you’re unconscious or otherwise unable to communicate, having a healthcare power of attorney in place ensures that your wishes for surgery, medication, and end-of-life care are respected and that a trusted individual can make decisions on your behalf to consent to or refuse certain medical treatments.
Will
A will allows you to designate who will inherit your property and assets when you pass away. If you don’t have a will, Pennsylvania’s laws will determine how your property is distributed in a process known as intestate succession. A will also allows you to name an executor to carry out your wishes and beneficiaries to receive your assets. Be sure to select alternate executors and beneficiaries in case your first choices are unavailable. A will is crucial for ensuring your wishes are honored after you’re gone.
Living Will (Advance Healthcare Directive)
A living will provides guidance on your medical care, such as a feeding tube, CPR, ventilator, etc., if you become terminally ill or are incapacitated. This document takes the guesswork out of your end-of-life wishes, removing the burden from your family’s shoulders of making difficult decisions during a challenging time.
Trusts (If Applicable)
If you have children, anticipate needing to manage assets for minors, or own out-of-state real estate, a trust is an important arrangement to have. Two of the more common types of trusts are a revocable trust, which can be changed or terminated, and an irrevocable trust, which cannot be updated once created. You can create a trust to direct how your assets will be handled for beneficiaries who are not yet able to manage them themselves.
When Should I Adjust My Estate Plan?
Life is full of changes, and each change can impact your estate plan. Major life events often signal when it’s time to update your estate documents. You should also review your plan every 3 to 5 years, or sooner if any of the following events occur:
Marriage
Changing your marital status may prompt a need to update beneficiaries and health care designations.
Birth of a Child
Your estate plan should reflect your new responsibilities, including appointing guardians for your child(ren) and setting up trusts for their care.
Buying a Home
Real estate is one of the largest assets you may own, and your will or trust should address its future.
Death of a Loved One
If a family member or close friend passes away, your estate plan may need to be adjusted to reflect changes in your responsibilities or wishes.
A New Job or Career Change
A new job could mean changes to your benefits, such as life insurance, which should be reflected in your estate plan.
Legal Guardianship
If you assume legal guardianship over a family member, your estate plan should be updated to reflect this new role.
Contact Our Team to Learn the Importance of Having an Estate Plan in Your 20s and For Help Getting Started on Your Estate Plan
Getting started with estate planning is easier than you think. The first step is to reach out to an experienced estate planning attorney who specializes in creating personalized plans tailored to your unique needs. An attorney can help guide you through the process, making sure your estate plan reflects your wishes and is legally sound.
At Friedman Schuman Layser, our estate planning attorneys have over 40 years of experience assisting clients of all ages in Pennsylvania with creating estate plans that protect their families and their assets. Whether you are just beginning to think about creating your estate plan or looking to update your existing plan, we are here to help. Complete our Estate Planning Questionnaire today, and one of our experienced Fort Washington estate planning attorneys will contact you to discuss the next steps in creating your customized estate plan.