Many people wait to begin planning their estate until they are older. However, it is never too young to start the process of planning for the future, and it should begin in one’s 20s.
An estate plan can benefit those who are making a good income as well as those who do not have much money or assets.
First steps
According to U.S. News and World Report, it is usually an uncomplicated process when planning an estate as a young person. One of the first steps is to name someone who can make decisions in the event an injury or other circumstance results in incapacitation. A power of attorney usually makes financial decisions, while a healthcare proxy makes medical decisions.
Writing a will is also part of basic estate planning. This names beneficiaries for money or assets in the event of death. Without a will, a judge decides who gets everything. As a younger person, debts like student loans must also be a consideration, especially if they are not forgiven upon death.
Choosing beneficiaries
According to CNBC, one of the issues with estate planning at a younger age is it may be more challenging to name beneficiaries for not only personal assets but also retirement accounts and life insurance. Many people in their 20s, and even 30s, do not have a spouse or children to pass things on to. In these situations, experts recommend being creative and choosing charitable organizations as beneficiaries.
The good news with starting early is it is possible to change specifics of the estate as things change. As assets increase, marriage occurs and babies begin being born, beneficiaries and other specifics can change.