If you’re an adult in your twenties or thirties, chances are that the idea of estate planning hasn’t even been a blip on your radar screen. But estate planning isn’t just for people with families, or businesses, or significant assets—though if you have any of those things, an estate plan is a must. Estate planning is for anyone who wants to exercise control over his or her future. Here are some things young adults, especially young professionals, need to consider.
Health Care Decisions
In all likelihood, you’ll be making your own health care decisions for many decades. But in case a sudden illness or accident causes you to be incapacitated, you’ll want to have certain documents in place.
One of these is a “Declaration as to Medical or Surgical Treatment,” also known as a “living will.” A living will dictates the administration, withholding, or withdrawal of procedures designed to prolong life. It applies when you have a terminal condition or are in a persistent vegetative state and are legally incompetent to make medical decisions.
Another essential health care document is a medical or health care power of attorney. This document names an agent to make health care decisions for you if you are unable to make them for yourself. You have the ability to grant your agent very broad or very limited authority in this regard.
Both health care powers of attorney and living wills can be revised or revoked at any time. However, you should be sure that your doctor or family has a signed copy of the most current version in case of emergency.
The financial powers are generally documented by a General Power of Attorney, sometimes referred to as Financial Power of Attorney. These function by issuing a grant of power by a principal to a person (agent) to make or carry out the decisions of the signer of the instrument. The grant of power can be limited or all-encompassing, but the agent’s authority under the power of attorney expires upon the death of the principal.
Wills and Trusts
A will is the first thing most people think of when they think of estate planning. Even if you don’t have as many assets as you would like, a Last Will and Testament will direct the disposition of those you do have; otherwise, they’re distributed according to state law, which may not coincide with your wishes. A will is also the only way that you can specify whom you want to act as a child’s guardian in the event that you and your child’s other parent die.
If you have a spouse, and especially if you have a child, you’ll likely want to establish a trust to provide for them in the future. Any children you have right now are probably young, and it will be many years until they have the maturity and ability to be self-supporting. Creating a trust, and funding it with a life insurance policy, is a simple way to provide support for your family—and peace of mind for yourself
If you’re a professional, you likely have a retirement plan through work, and you may have set up an Individual Retirement Account (IRA) outside of work. If you should die, the assets in those plans will go to beneficiaries you’ve designated. Make sure those designations are up to date and that you take the time to name both primary and contingent beneficiaries.
Thinking about what will happen to you, your family, and your assets in the event of a tragedy is hard to do when life seems to be stretching out before you. You have plenty of time to think about these things—until suddenly, you don’t.
Planning for an uncertain future is both easier and more cost-effective than you might imagine. To learn more, contact the experienced estate planning and probate attorneys at Davis Schilken. Call us at 303-670-9855 to arrange a consultation at one of our two locations in The Denver Tech Center and Golden, Colorado. We look forward to working with you.