Why is Estate Planning Essential for Young Adults?
Unsurprisingly, the concept of Estate Planning is not top of mind for most young adults. During your 20s and 30s, most people are busy with school, careers, building wealth, and starting families. Falling ill or dying simply aren't on the radar. Though the pandemic elevated the public's awareness of how important it is to think these things through, many young, single people still believe that they do not need an estate plan merely because they do not have much to leave to anyone. But everyone, at any age, can benefit from Estate Planning, no matter their net worth.
Estate Planning is about much more than what will happen to your assets when you're gone. It is all about protecting you and your loved ones. You do not need a lot of assets to decide who should inherit your personal property in the event you die or stipulate your preferences for your end-of-life or other care should you become incapacitated. Starting when you're eighteen, or however old you are right now, it is essential to consider an estate plan. Here are some reasons why:
Your children
Estate Planning is an absolute must for those with children. An estate plan allows you to determine who you should care for your minor child(ren) in the event of incapacity or death. In Maryland, a guardian for a minor child can only be appointed by the surviving parent or a Court. A guardian appointed by the surviving parent does not need to be approved or qualify in a Court.
An estate plan is so important for parents because it allows you to appoint one more guardian and alternates for your child(ren) should anything happen to you. It ensures that your child(ren) will be in the care of someone you trust. Appointing a guardian in your Estate Planning documents allows for an easy transition of finances and care for your child(ren) while also enabling you to make specific decisions regarding their life. For example, through clever Estate Planning tools, you can decide where they will live, where they will go to school, and even set aside funds to do things like travel or take gymnastics lessons.
Your Digital Assets
Adults from 18-40 years old dominate the cryptocurrency market with a 94% market share. They have more digital footprint than any generation before. In fact, they aren't just investing in Bitcoins; they're also buying digital art and virtual real estate. With these niche assets hiding in a digital wallet, thinking about where they are, where they should go, and the tax implications to your loved ones receiving these assets are important.
One should also look at their social currency. Instagram, Facebook, Twitter, and even your iPhone can all become a part of your "digital estate." By designating someone as your Personal Representative in your Estate Planning documents, they can deactivate your online accounts and transfer your photos from your virtual albums. Estate Planning is very important because it will protect your privacy and make the already tedious estate administration process easier for your loved ones.
Your Health and Wellbeing
An estate plan can also allow a person or persons of your choosing to act on your behalf if you become mentally or physically incapacitated. An Advanced Health-Care Directive deals explicitly with medical decisions. People often forget that due to privacy laws, after turning eighteen, our parents have no right to our medical information unless we have authorized it or they have been appointed as your legal guardian by the Court, which can be a very expensive and time-consuming process. So, during an emergency or at the end of life, your parents will not be privy to your medical condition absent a guardianship proceeding. An Advanced Health-Care Directive will allow your designated agent to have access to your medical information.
Moreover, this legal document instructs your designated agent, doctors and caregivers about the kind of care you would like to receive if you cannot communicate medical decisions. If you do not have an Advanced Health-Care Directive and cannot make decisions independently, the law determines who may make medical decisions on your behalf. This is typically your spouse, your parents if they are available, or your children if they are adults. Research shows that people incorrectly guessed nearly one out of three end-of-life decisions for their loved ones. An Advanced Health-Care Directive eliminates the guessing game and the pressure on your loved ones to make the correct decision.
Conclusion
Estate planning may feel like something you can put off, but illness and accidents don't discriminate. Incapacity can happen to anyone anytime, leaving life and death decisions in the hands of a Court or someone you don't trust. Estate planning isn't just for the wealthy or elderly; it is a plan for people of any age to control who will take care of their loved ones and assets in the event they can no longer do so, and most importantly, to decide who can make medical decisions on their behalf if they're unable to do so themselves. Having an estate plan is the best way to provide security for yourself and your loved ones.
If you or someone you know would like to establish an estate plan Contact Andryse Leukeu or one of our other estates & trusts attorneys today!