Estate planning is often associated with people entering their retirement years who have many assets to take care of. However, the process is crucial for people of all ages, including people in their 20s.
Creating an estate plan while you are young protects your family after you are gone. Estate plans can also benefit people while they are still alive, provided you take the right steps. Here are a few things to include in your estate plan for the best results.
Create a will
Wills are the cornerstone of all good estate plans. These documents allow you to disperse assets like property and savings in the manner you see fit. They also let you name a guardian for any minor children in your care, which is quite reassuring to new parents. If you do not have a will, the court will make decisions regarding your estate after you die.
Choose a health care proxy
Health care proxies are personal representatives who advocate on your behalf. This is crucial if you cannot make these decisions on your own due to major illness or injuries. The person you choose will make sure you receive the proper medical care according to your advance health care directive. They will also speak with the medical professionals treating you, as well as your family, if they have questions about what sort of care you desire.
Along with wills and trusts, you can leave the proceeds of your estate in other ways. For instance, life insurance policies and 401(k) plans require you to designate beneficiaries. After you die, the beneficiaries you name will receive funds according to your wishes.
You must ensure that beneficiary designations are complete when opening a life insurance policy or 401(k). You must also update designations as needed as your life changes. Remember, whoever you name on the document will receive the proceeds, regardless of the information contained in your will.