Estate planning can be an intimidating process, but it doesn’t have to be. Having your wishes clearly defined can alleviate your family and loved ones from a great deal of stress. Planning ahead will only benefit you in the long run. As a young adult, estate planning allows you to take stock of your assets as they grow. Here are five myths that often stop people in their twenties from starting the estate planning process:
Myth: People in Their Twenties are Too Young to Begin Planning Their Estate
It is common for young adults to assume estate planning is for retirees or those facing end of life. However, estate planning is equally important for young adults.
Adults in their 20’s are in a unique and beneficial position when it comes to estate planning. Many are in the process of defining long-term goals, establishing their life plan, and working toward acquiring assets while being far from retirement. It is an ideal stage in which to consider options for wealth-building and maximizing retirement benefits, and planning. In addition, it is important to consider unforeseen circumstances.
One estate planning age restriction: You must be at least 18 years old to create a will in Maryland.
Myth: Estate planning only applies to real estate owners.
The belief that estate planning is only for homeowners is a widely-held misconception among people in their 20’s. Contrary to this belief, is not necessary to own a home or have sizeable assets to plan your estate.
Estate planning encompasses all of your assets, not only real estate. This includes, but is not limited to: vehicles, electronic equipment, investment accounts, family heirlooms, and valuable personal possessions.
Myth: Estate planning is not necessary for those with no children or beneficiaries.
Even with no children or heirs, it is important to consider the people you leave behind and preemptively mitigate disputes or confusion that may arise in your absence.
Petcare is an often-overlooked aspect of estate planning. While a pet cannot be a beneficiary, there are ways to ensure your pet’s needs are met in the event of your death or incapacitation. One option is a pet care trust, which allows for funds to be allotted to the care of a pet after the death of its owner.
Charitable estate donation is an appealing choice for those with no heirs, and can be laid out in one’s will. It is an alternative to dying intestate, which leaves asset distribution in the hands of the state.
Myth: A will is enough.
There is more to estate planning than making a will. While a will protects your assets and possessions, a will alone does not cover everything.
In the event that you can no longer make or communicate your healthcare decisions, it is essential to delineate your legal, financial, personal, and medical wishes. You may also wish to appoint an agent you trust to make these decisions on your behalf. A Power of Attorney (POA) form authorizes an agent to make legal, financial, and personal decisions on your behalf. For example, the POA is helpful for college students who may be studying abroad and need a parent to assist with taxes or other financial matters while they are gone.
Advance directives are medical powers of attorney. An advance directive protects your right to request specific treatment for medical care or refuse medical treatment that you do not want in the event that you become incapacitated, and appoints a healthcare agent to make specific or general healthcare decisions on your behalf.
Myth: Estate planning is a one-time task.
Estate planning is a continuous process. Get into the practice of revising your estate plan periodically, especially following significant life events. This includes:
- Changes in marital status
- The birth or death of family members
- Change in homeowner status
- Change in residency (state or country)
- Change in career/income
Estate planning in your 20’s may not be on the top of your must-do’s, but it should be. Making important and sometimes tough decisions now will lay groundwork for the more complex planning that will come later. You will also spare your loved ones the hassle and heartache of distributing your assets if and when the unexpected happens. If you live in Maryland, contact us at the Law Offices of Elsa W. Smith, LLC to schedule your estate planning consultation today.