Illinois residents in their 20s may not give much thought to estate planning. They may assume that it is only for the elderly and the rich. Since they do not anticipate death in the foreseeable future, and they likely have not yet accumulated much in the way of assets or property, they may not see the necessity.
Nevertheless, a different perspective shows why estate planning is important even for young adults. Rather than thinking of estate planning as a way to protect one’s property, millennials and younger adults should think of estate planning as a way to protect their loved ones from unnecessary legal trouble in the event of unexpected death or incapacitation. From that perspective, it becomes clear that, once one becomes an adult, it is not too early to start estate planning.
The estate planning process often looks slightly different for someone in their 20s than it does for those who have lived longer and had the chance to acquire more property. The following are some practical estate planning tips for young adults.
- Take stock of assets
According to CNN Money, the first step in estate planning involves taking stock of what one owns, including both tangible and intangible assets. A young adult may not yet have much in the way of property, but he or she may own a car, family heirlooms, life insurance and/or retirement accounts from a job, etc.
- Choose one or more decision-makers
For a young adult with little property, a will may not be a top estate planning priority. More important at this point, as U.S. News and World Report explains, is appointing a health care proxy and durable power of attorney to handle decision-making responsibilities in the event of incapacitation. The same person can fill both roles if desired. It is advisable to assign these responsibilities to a family member.
Once an individual has named decision-makers, it is a good time to start thinking about a will.
- Consider beneficiaries and executors
Beneficiaries are people who inherit after somebody has died. Even those who do not have much in the way of property or assets should think about who receives what following their death and name beneficiaries in their wills. The will should also name an executor who acts as the agent of the person who has died and carries out his or her wishes to the extent possible.