As a young person, you may not see the importance of an estate plan. To you, it may appear more important once you're in your 40s or 50s, or maybe you feel you don't need one until you have children. The truth is that it's a good idea for any person to have an estate plan as soon as possible.
Without an estate plan, there's no way to know what you want to have done with your assets if you pass away. You also would not have any information on what should happen if you suffer a severe injury or disability that makes it impossible for you to make decisions for yourself.
Here are three questions you should be able to answer once you have an estate plan.
1. Who gets my assets when I pass away?
To help determine who gets what when you pass away, it's important to create a will. The will is a legal document that names your beneficiaries and describes what is to happen to your estate. As you age, you can have the will adjusted to reflect changes in your life.
2. Who has the right and access to my personal files and documents in the case of my death or disability?
Normally, a person with Power of Attorney has access to important files and documents. You may also decide to create a list of important items and to keep those items in a designated location. You should collect things like your life insurance policy, bank account numbers, loan documents and billing statements in one location, so they're easy to find when necessary. Tell at least one person where to find this asset inventory, so he or she can access it when the time comes.
3. If I'm disabled, who is in charge of my estate and who will help determine what happens to me while I'm unable to care for myself?
You need to select at least one person to be a Power of Attorney for your estate. This person acts on your behalf when you're unable to do so yourself. A POA may be activated only when needed or immediately, depending on your preferences. A durable POA expires at death. You can also choose to have medical POAs or financial POAs. You could even choose different people for each role. A living will helps someone with Power of Attorney make final life-decisions for you in the case that you're unable to make those decisions for yourself.
These are just a few things to keep in mind as you start your estate planning process. Your attorney can help you make sure your assets and wishes are protected.