Only 25% of 18 to 34-year-old Americans have an estate plan in place, despite the increase of deaths among young people since the beginning of the pandemic. You need to prepare for the unexpected, even while you’re young.
An estate plan is a plan that delegates your belongings to your loved ones or organizations in the event of your death. Everyone has an estate. It includes everything you own, including your money, car, and objects.
It’s better to make an estate plan sooner than later. The best time to make one is now, as you never know what could happen to you tomorrow or a year from now.
When you turn 18 and graduate high school, you’re a legal adult. It’s important to have a plan in place, so you don’t have to stress about making an estate plan last minute when you’re older or sick.
Talk with an Inkwell professional today to discover the benefits of developing an estate plan at a young age.
Estate planning is important for people of all ages because it ensures that the people you love will receive your benefits after your death. Without an estate plan, nothing is stopping government agencies from taking your dog even though you wanted your family members to have it.
You might think, “I’m young and healthy, why do I need an estate plan now?”
Unfortunately, tragic accidents happen all the time that leave young people incapacitated or injured and unable to make their own decisions. It’s best to have a secure plan in place for these reasons:
If you just graduated high school, you’re most likely overwhelmed with financial decisions, student loans, and other new responsibilities. Those responsibilities only get bigger as you get older.
It’s best to be ahead of the game and take your finances into your own hands now, so you’re not overwhelmed in the future. Here are decisions you should make now so the future is less stressful:
Following this advice not only helps you while you’re in college, but it also helps you in the future. Opening a line of credit helps you after you graduate and want to make big purchases. Having a plan in place protects you and your estate if anything happens to you while you’re away at school.
Estate planning as a young adult seems scary if you don’t know your options. Here are some of the ways to plan for the unexpected at a young age:
A power of attorney grants a trusted individual to make financial and medical decisions on your behalf if you’re unable to make them yourself. Setting up power of attorney while you’re young ensures you’re taken care of if you’re incapacitated due to mental or physical illness—which happens at any age.
Consider giving a close friend or family member power of attorney so you know your finances are in the hands of someone you trust if something happens to you.
A will is an estate plan that assigns your belongings and finances to your loved ones in the event of your death. Wills must go through the probate process, a court-monitored process that determines if your will is valid or not, before giving your family the benefits you’ve left them.
Probate courts are expensive, so this might not be the option for you if you want to save your family money. On the other hand, a will allows you to divide your belongings the way you want, so just remember this type of plan comes with pros and cons.
Living trusts are estate plans that avoid the probate process. While they’re more expensive to set up, they keep your family from dealing with the court system which saves them money in the long run.
Estate planning for young adults is overwhelming but necessary since you never know what will happen in the future. Inkwell takes off the stress of the entire process by creating a plan that fits your personal needs.
We make estate planning simple, understandable, and less daunting for young people. We know you have a lot on your plate as a young adult, and we want to help.
Contact an Inkwell professional today to create an estate plan before it’s too late.
What would you do if you couldn’t handle your own financial and medical decisions? What if your health deteriorates, making you unable to manage these arrangements? Delegating a power of attorney to someone you trust makes sure your affairs are in order.
A power of attorney (PoA) allows you to put financial decisions in the hands of someone you trust. When deciding who to choose as your power of attorney, consider a family member or close friend that you believe can manage your financial and medical decisions the same way you would. Making a PoA part of your core legal plan guarantees that these affairs are taken care of for you if you can’t take care of them yourself.
In the PoA relationship, there’s a principal, the individual signing over their financial decisions, and the agent, the other person that the individual chooses. The agent assumes financial responsibility for the principal. It’s the agent’s job to protect the individual’s assets, oversee financial choices, and handle day-to-day finances.
A PoA is beneficial for everyone, no matter your age, current health status, or income. You can’t predict the future, so it’s better to be prepared for the unexpected, which is why a PoA is helpful. It takes unknown stress off your shoulders and provides a stable, safe plan in case anything happens to you that makes you incapable of managing your affairs.
There are several types of power of attorney used for different transactions:
A healthcare or medical PoA allows a trusted individual to make medical decisions for the principal if they don’t have the mental capacity to do so. The principal gives consent to the agent beforehand to act as their medical PoA.
A non-durable PoA is only in effect for a certain amount of time. It allows the agent to act on the principal’s behalf for a specific transaction and time, and once that transaction is complete, the PoA is no longer in effect.
A durable PoA allows the agent to act on behalf of the principal at any given time. There isn’t a set period for how long the PoA is active. Once the principal becomes unable to make decisions for themselves, the durable power of attorney goes into effect automatically and doesn’t end until the death of the principal.
A special or limited PoA is explicitly for a one-time banking or financial transaction if the agent is unavailable, sick, or has prior commitments. Limited PoA and non-durable PoA are similar in that they’re both for limited amounts of time, but limited PoA is only for financial affairs. Once the singular financial transaction is complete, the agent can’t act on behalf of the principal, and they no longer have any authority as the agent.
In 2019, only 18% of Americans over 55 had a durable power of attorney. Today, that number has risen to 33%. The pandemic has nearly doubled the number of adults over 55 with a PoA, but over 50% of this population still doesn’t have one.
Because of the ongoing pandemic, more people are delegating a power of attorney in case they become ill and can’t make their own decisions. Now, more than ever, it’s vital to have a PoA. In these unprecedented times, you never know when your health could decline.
Are you interested in a PoA relationship? Inkwell offers plans for all of your PoA needs. Our team of experts can set up a healthcare power of attorney to make health-related decisions for you. If you want an agent to handle personal affairs, medical decisions, and finances when you are unable to, a durable power of attorney is a great option. We provide plans for all ages because we believe everyone needs to be prepared for the unexpected. Contact us today to feel secure in your future finances and medical decisions.