A lot of people assume that estate planning is just for the old and the wealthy; however, that is not the case. As a Daily Finance article discusses, when you are in your thirties, planning for your eventual passing is not usually a top priority, but most estate planning experts agree that this is the best time to begin to create an estate plan that will protect you and your family in case the unexpected occurs.
Sometimes it can be even more important for people in their thirties to create an estate plan because they have just as much to lose, sometimes more, than their parents and elders. A lot of people entering this decade are settling down, getting married, buying their first home, and having children – all of which needs to be protected.
An estate planning attorney can help you start to draft your estate plan, and here are the basic documents that you should consider putting into place:
A Basic Will or Trust
A basic will or trust establishes who will inherit your possessions and assets when you die. These documents also state who you want to administer you estate, and if you establish a trust it will also contain any specific instructions or requirements for inheritance.
Durable Power of Attorney
In the unfortunate case that you are incapacitated and unable to make decisions for yourself, a durable power of attorney appoints another person to make decisions regarding your finances and other legal, non-medical decisions. This can include paying bills, managing your assets, and handling any other accounts.
Living Will
If you do become incapacitated or unable to communicate your decisions with others, a living will outlines what your wishes are regarding your own personal care. It includes what medical procedures you do or do not wish to have, what medications you do or do not want, and whether you wish to be resuscitated in the event of a life-threatening event.
Healthcare Proxy
A healthcare proxy, otherwise known as a medical power of attorney, is bound by the directives set forth in your living will regarding your medical care if you are unable to make those decisions on your own. If there is no living will, the healthcare proxy is given the responsibility to make all medical decisions on your behalf according to what they think that you would want.
Life Insurance Policy
Term life insurance can be a cheap, cost-effective way to protect your loved ones in the case of your death. It will allow them to cover any costs or debts after you are gone. Many people in their thirties also consider a permanent life insurance plan to fund retirement, growth, education savings, and any other unforeseen emergency.
Retirement Fund
One of the most essential parts of an estate plan for a person in their thirties is to establish a retirement fund. This is particularly important if your employer offers incentives like profit-sharing or matching contributions to an IRA or 401(k). An important thing to note for both a retirement fund and life insurance policy is to name someone responsible as the beneficiary and to update it as your life changes.