If you’re a typical twenty- to thirty-year old, you might think you’re not old enough or wealthy enough to need an estate plan. Don’t make this mistake. Failing to plan for the worst now can create an incredible amount of emotional and financial stress for your family at a time when they’ll need to focus all of their energy on other matters. Although it may seem like a daunting task, getting the right documents in place can be straightforward and inexpensive.
Health Care Directives and Powers of Attorney
The two most basic estate planning documents every adult should have are a health care directive and a power of attorney. These documents ensure the right people will make decisions for you if you can’t make them for yourself. Without them, your family may have to go to court and ask a judge to decide who will be responsible for making difficult decisions on your behalf. For example, if you have not put together a health care directive to document your wishes in the event of becoming critically injured in an accident, a court-appointed family member would have to make the painful decision of keeping you on (or removing you from) life support. Without naming someone specific to be your power of attorney, a family member who doesn’t have the time, skills or desire to handle your matters may be forced to take on the job. By giving someone you trust the power to make your medical and financial decisions before something happens, you can avoid creating unnecessary pain and confusion for those close to you.
Wills and Personal Representatives
As a young adult, you might think your financial net worth doesn’t justify the cost of preparing a will. However, a will doesn’t just let you dictate where your assets go; it prevents any potential disagreements between your family members and avoids the headaches and costs associated with probate court. If you die without a will in Minnesota, your net assets will go to your family members (in a specific order) without regard for the actual state of your relationships. If you have family members who are estranged, bad with money management, or have mental health or chemical dependency issues, you may want to restrict who gets what and when. A significant other who might expect to receive some of your shared treasured belongings may have no rights to the property. Putting together a will can help avoid these sensitive situations.
Digital Assets and Online Accounts
Not all assets are financial, or even tangible, and state law may fail to ensure your digital assets are properly managed. Consider this: if you die, who will have access to your Venmo account? Who will shut down your Netflix, Amazon Prime, and other subscription services? Who will control your Snapchat, Instagram, Facebook, and other social media accounts?
We now own more digital assets than ever—with monetary and sentimental value—and all of them are protected by passwords, encryption, data privacy and even criminal laws. If you don’t designate someone who can access and manage your online accounts, the accounts (and the assets and information in them) may be lost forever. A proper estate plan can ensure the right people will have the necessary authority to access and manage your digital assets.
This should go without saying: if you have children, you need to designate someone to take care of them if you are unable to do so. If there is no surviving parent to take care of your children, a court will make that decision for you – often through a very painful and expensive legal proceeding.
Estate Planning – The Easy Solution
Estate planning is not just for the old and rich, and it doesn’t have to be complex or expensive. By having a short conversation with an estate planning attorney and signing a few documents, you can ensure your wishes will be followed—while avoiding bitter and costly fights among family members—if something happens to you.