Even if you don’t have a lot of assets right now, it is a good time to create an estate plan and spare your heirs additional grief, according to the Chicago Sun Times in “Estate Planning: Now’s the time to prepare.”
As soon as you have assets to pass down to loved ones, you need to start planning your estate. If you start in your early 20s, it will become a habit and an on-going process.
Even if you don’t have a lot of assets, it doesn’t mean that you’re excused from planning for the worst situation.
Whether you do a basic estate plan, like putting a will, powers of attorney or a health care directive in place or if you need complex trusts and tax sheltering strategies, having an estate plan means you have a voice in what happens, even if you aren’t able to convey your wishes.
What do you need?
- Everyone needs a will.
- Everyone should review their beneficiary designations every few years to make sure the people named are still the people intended to receive the proceeds. That includes bank accounts, insurance policies, IRAs and more.
- Everyone needs health care and financial power of attorneys to outline their wishes.
If you are a parent, in most states, you need a will to name guardians for your minor children. You also need a 529 College Savings plan to start saving for college, which comes up faster than you can imagine.
You may need a trust, which offers more privacy than a will, because it keeps details about your private belongings and assets out of probate court.
You also need to organize your digital assets, as well as your financial and physical assets. Keep a list of your accounts and passwords. Most digital platforms from Facebook to Google to your financial institutions, have policies about what happens to the accounts and who has access.
Keep a list of your advisors and their contact information. That includes your estate planning attorney, CPA and financial advisor. You may want to have them meet your family members, so they are more comfortable with these advisors, when the time comes for them to work together.
As you move through the various stages of life, your plan will change. However, you should get started now, so the process becomes second nature. Your family will thank you.
An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances.
Reference: Chicago Sun Times (Sep, 17, 2018) “Estate Planning: Now’s the time to prepare”