When you are in your 20s, particularly your early 20s, estate planning may not seem like a pressing issue for you. You likely have not built up many assets or are just beginning to. However, contrary to popular belief, estate planning is important for anyone over the age of 18, regardless of what they own or how much money they have.
Why You Should Start Estate Planning in Your Early 20s
Each person’s situation is different, but we encourage anyone over the age of 18 to create a basic estate plan that includes a will, a power of attorney, and an advance medical directive. Here’s why:
1. You don’t know when you will fall ill or pass away.
You may not be elderly or terminally ill, but tragedies happen to young, healthy people all the time. None of us think it will happen to us or the people close to us until it does. It is wise to plan for the possibility that you could either become incapacitated or die unexpectedly. It is always better to plan for an unlikely tragedy than to be unprepared should the worst happen.
2. You likely own at least one item of value.
Even if you don’t own many assets, chances are you have at least one asset of value, whether that be a bank account, a small house, or a retirement account. You need to address even your smallest assets to control where they will go if you want to them to go where you want instead of the state directing them if you pass away.
3. You have loved ones.
Estate planning is not solely about your assets. In fact, it is primarily about your loved ones. An estate plan ensures the right personal property goes to the right people. Estate planning is also an opportunity to communicate your care, values, and beliefs to others. By pairing legal end-of-life documents such as an advance medical directive, will, and beneficiary designation with practical and relational end-of-life documents such as an ethical will and an estate guide and inventory, you will have arranged ahead of time to care for your closest relationships if you become incapacitated or die.
A Note on Minor Children: If you are in your early 20s and you have any children, an estate plan becomes doubly important for you. You will need a will that designates a guardian to care for your minor child or children should you become incapacitated or pass away.
4. You are no longer a minor.
Before you reach the age of 18, these issues are all provided for under law because you are a minor. Your legal guardian would have access to everything they need in the event of your illness or death, but that completely changes when you become a legal adult. Your parents, grandparents, or siblings may not automatically have the right to make medical and legal decisions for you unless you grant them that power ahead of time. So, even though a tragic event is unlikely to happen, it is best to pre-arrange for those closest to you to be able to legally act on your behalf, just in case.
What Happens If You Don’t Have A Plan
Not having an estate plan is not worth the risk if you fall seriously ill or die. As mentioned in the previous section, if you fall seriously ill or pass away at a young age, your family will not necessarily have the legal access they need to care for you and your assets. For example, if you have a checking account with $10,000 in it, and you know you would want that money to go to your brother if you died, you need an estate plan. If you do not make your wishes legally binding, that money would, by state law, automatically go to your next of kin, and according to Virginia laws, your brother would not be at the top of the list.
If you have specific wishes about your possessions and medical decisions at your death, you need an estate plan so that your wishes are carried out instead of the state’s default plan.
The Benefits of Creating Your Plan at a Young Age
If you create your estate plan now, in your early 20s, you will ensure:
- Your medical wishes must be carried out even if you are not in a position to speak for yourself.
- Your wishes related to your assets must be carried out by law if you die.
- You will have put adequate provisions in place for yourself and your loved ones.
- You will have a structure in place. Any plan is better than no plan, and your current plan can always be updated as you age to reflect your current circumstances, relationships, and goals.
Early Estate Planning: Get Started with Relational Estate and Elder Law, PLC
Here at Relational Estate and Elder Law, PLC, we work with clients of all ages to create plans that match their goals and current life stage. If you are in your early 20s and want to create a solid estate plan that will protect you, your loved ones, and your assets, schedule an appointment with us today.