Young adults who may just be starting a family often feel they have plenty of time to focus on building a financially secure future and before needing to create a comprehensive estate plan. However, estate planning, even for young adults, is crucial to ensure that children and other loved ones will be cared for if something unexpected happens. Although planning for when you are gone can be uncomfortable or scary, it’s important to do this planning so that property is passed on to your chosen beneficiaries and so that loved ones are taken care of according to your wishes.
A basic estate plan for a young family should at least include the following:
- a last will and testament
- a power of attorney for health decisions
- a power of attorney for financial decisions
- a living will
- a nomination of guardian
A trust may also be recommended, particularly for those who own real property and have young children.
One of the main decisions that need to be made is who will serve as fiduciary, including the trustee under the trust, personal representative under the will, and the agent under the power of attorney. Although it’s common for people to name their spouse or a life partner, it’s wise to include an alternate fiduciary in case something happens to both spouses or partners at the same time.
Another vital part of an estate plan for young parents is choosing a guardian for minor children. A guardian will continue to raise the children and manage their financial affairs if something happens to the parents. If parents do not nominate a guardian, the court will appoint a guardian that may not be someone who the parents would have chosen, doesn’t hold the values parents would have wanted to instill, or doesn’t know the children well. Parents can name a guardian who will raise their children according to their wishes in a well prepared estate plan.
An estate plan also must address the distribution of assets following one’s death. Typically, assets pass to the surviving spouse when one spouse passes away. If both spouses die when their children are minors, parents often want their assets to be used to care for their children. Parents may want to use a trust so that assets are managed in a way that best provides for their children’s health, education, and care.
Finally, it’s also important to prepare for one’s disability. Powers of attorney for health and financial decisions are used to nominate an agent to act on one’s behalf in the case of one’s incapacity.
Estate planning isn’t just important for older adults, it is also crucial for young adults to protect and provide for their children and other family members and loved ones.
For help creating or updating your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.