You may think estate planning is for wealthy or older people. However, even with limited assets, young people need to prepare for unexpected events, too.
Regardless of your net worth, you want a plan in place to protect the people close to you. An organized estate strategy prevents your parents from going through probate to handle your accounts and clear your debts.
What is estate planning?
An estate plan explains what you want to happen with your money after your death. It contains a set of documents that details your assets, like your bank accounts and personal belongings. Even without significant funds in the bank, a legal plan helps your family gain access to what you have without court proceedings.
At what age should you begin planning your estate?
It is never too early to think about what would happen to your money and possessions after you die. When you are in your twenties, this kind of preparation addresses essential tasks in the event of unexpected circumstances.
Creating a valid will helps the courts and your loved ones understand and carry out your wishes by designating beneficiaries and an executor. You can name the powers of attorney to make medical and financial decisions if you become unable to do so. You also want to create a health care directive to explain your wishes regarding medical care if you become incapacitated.
Without a legal will and estate plan, the court decides how to distribute your possessions, assets and money. When you take the time to prepare legal documents, you protect your relatives from unnecessary trouble and lay the groundwork for more complex planning in the future.