Making that leap to adulting can be exciting. You’re no longer living under your parents’ roof, and you’re doing adult things such as working, paying rent and buying groceries.
The last thing on your mind is creating an estate plan because that seems like something for the elderly. However, estate planning is something that every adult should do and it shows an exceptional level of maturity that you are thinking long-term.
An estate plan doesn’t need to be complicated
You’ve probably already learned that life is unpredictable. And even though you’re young and healthy, the unexpected can happen. While most people associate estate planning with dying, it’s also for situations where you can’t speak for yourself.
At your age, you probably haven’t accumulated a lot of assets or have a significant investment portfolio. You also may not have any dependents yet. Therefore, a simple estate plan will probably suffice. Here are the three main components of a simple plan:
- A will
Your will is the foundation of your estate plan. It specifies what should happen to your belongings, such as a car or other personal items, savings accounts, pets and any special bequests to a close friend.
- Beneficiaries
You likely already named beneficiaries if you have a bank account, retirement fund or a life insurance policy. These are the people you care about choosing to get the money in these accounts after you have gone.
- Power of attorney (POA)
This allows you to designate a trusted individual to decide on your behalf if you can’t do so yourself. A Medical POA lets someone make healthcare decisions for you, while a financial POA grants someone the right to handle paying your bills and managing your accounts.
Starting a small, simple estate plan now will make it easier to update it as your life changes.
