There is a false perception that estate planning is only for old or rich people. However, everyone needs to consider how their assets will be distributed in the future. Taking time in your 20s or early 30s to plan can save you time and effort later on.
You don’t have to plan everything right now. You should consider the basics first and move on to more complex estate-planning as you get older. It is vital to plan now in case of an emergency or unexpected tragedy.
Start with a Power of Attorney. The Power of Attorney is often associated with your will and who regulates your final wishes. In reality, the Power of Attorney is someone you trust the legal power to sign your name. It’s incredibly helpful in medical situations where you cannot speak on behalf of yourself in probate court. They can also act as your health care proxy, or you can assign another person that role.
Think about beneficiaries and wills. It can be daunting to write your own will, but it is a necessary part in the planning process – especially if you have children of your own. In your will, you want to name the guardians of your children if something happened to you. You also plan out the division of your financial portfolio. You can also establish beneficiaries for your retirement account and insurance policy.
Consider life insurance. Speaking of insurance, it might be a wise decision to set up a life insurance policy. You don’t necessarily have to take out a whole life or variable life policy, but you should think about a consider term policy. It provides a cheap, cost-effective way to cover current debts that you don’t want to burden on your significant other or family members.
Look into a retirement fund. The earlieryou start saving for your retirement; the earlier you can retire. But what are the best ways to save money for retirement? If your employer offers a 401(k) plan, you should put as much as they allow. This especially important if they offer matching funds. If you don’t have programming through your employer, you can use a Roth or traditional IRA for investing. The more money you put into those accounts now, the better the interest will be.
It’s important to take planning seriously, so talk with family members, close friends and planning professionals to assure you are securing your future in your best interests. You can always return to these plans if circumstances change.