Too many people assume that estate planning is only for the rich and old, but the truth is, the young and broke can benefit from having a plan in place, too. According to U.S. News Money, estate planning has nothing to do with your net worth but everything to do with protecting your loved ones in the event of your death. Whether you are in your 20s and living in your parent's California home or you are 40 and have a house and family of your own, now is the time to begin thinking about to whom your assets will go in the event of a tragedy.
Depending on your age, your estate planning efforts may involve little more than naming a healthcare proxy. If you are still young, single and without a lot of assets, you may not need a will or trust, but you could benefit from naming a healthcare proxy. This person will make healthcare decisions on your behalf in the event that you are unable to make them yourself. Too many young adults assume that their parents can make these decisions, but once a person turns 18, the government strips that power from them entirely.
In addition to naming a healthcare proxy, you should also appoint a durable power of attorney. This person can manage your finances and ensure your funds go to the correct person in the unfortunate event of your early death.
Regardless of your age, if you have a job that offers a 401(k) plan, life insurance coverage and other benefits, your next step in the estate planning process should be to name beneficiaries. If you have yet to start a family of your own, consider naming your parents or siblings. If you have a spouse and children, they are an obvious first choice.
Finally, draft a will. Even if you have little assets to your name, they will all need to go to someone upon your death. Assets include everything from your checking and savings account to your bedroom furniture. As Penn Mutual Life Insurance Company's assistant vice president of advanced markets implies, you do not want your loved ones to have to go through the probate process for meager but still cherished belongings.
This post is meant to be purely educational. It should not be used as legal advice.