The central idea behind estate planning is to prepare for the legal realities that follow after you die leaving behind property. Needless to say, the possibility of dying isn’t something most younger people really take seriously. Even older people are reluctant to think about these issues because they’re often difficult to deal with.
Both the fact that estate planning can be tough to think about, and that most people don’t have to think about it until they are much older, contribute to the vast majority of people under the age of 40 not having any kind of estate plan at all. Though this is expected, it isn’t wise.
The reality is, everyone needs to have an estate plan in place as soon as possible. For people under the age of 40, your plan will likely not be as complicated as a plan created by someone in their 60s, but it will address important issues. Only by creating such a plan will you be able to be sure that your wishes will be honored should certain events take place.
The Big “What Ifs”
What if you are involved in a car accident and hospitalized? What if you don’t recover and are left unable to manage your affairs? What if you die prematurely and your young children are left without parents?
For people under the age of 40, the “what if’s” are the main reason you should create an estate plan. Even though the chances that something serious happens to you are very small, these types of disasters do happen. If you are unprepared for them, you and your family can be left with a lot of problems. If you are incapacitated, for example, you will leave it up your family to make some very important decisions without your help or guidance.
Estate Planning Before 40: Simple Estate Plan Devices
Estate plans for people under the age of 40 don’t have to be very complicated. Most people under 40 don’t have significant assets, and many actually have more debt than they do anything else. If this is true, your estate plan will likely consist of several key elements that you can supplement with new tools as time goes on and your circumstances change.
First, there is the last will and testament. Through your will you can make important decisions, such as deciding who should become the guardian of your children should you die before they become adults.
Second, there are advance medical directives. These directives state what kinds of medical care you do or do not wish to receive in the event of a medical emergency.
Finally, there are powers of attorney. If you are incapacitated, your power of attorney will allow your spouse, or someone else of your choosing, to step in to manage your affairs until you recover.
Of course, there are a lot more estate planning tools available to you, which your estate planning lawyer will tell you about in more detail.
There’s a lot more you can learn about estate planning by attending an upcoming free seminar. Visit the seminars page for details.