The Importance of Estate Planning For Young Professionals
It is never too soon to start planning for the future.
While Estate Planning is often associated with an older demographic, it is never too soon to start planning for the future.
Establishing a comprehensive Estate Plan is particularly beneficial for young professionals who are seeking to accumulate wealth, buy their first home, pay off student debt and secure their family’s future. If you are curious about why planning is necessary or where to begin, here are some of the important documents to consider:
Power of Attorney:
Currently you may be as sharp as a tack but should you suddenly become mentally incapacitated either temporarily or permanently, who would maintain your fiscal responsibilities? Establishing a Power of Attorney allows you to elect a trusted individual as your agent to make financial decisions on your behalf, including paying bills and student loans, writing checks, and making purchases if you are unable. Your spouse, significant other or parents do not automatically have legal right to make financial decisions for you without being first elected. A Durable Power of Attorney is considered one of the basic building blocks of every estate plan. While other documents affect your heirs, Durable Power of Attorney directly affects you during your lifetime.
Advance Directive for Health Care:
While today, you may be relatively healthy, a traumatic life event can change everything. If you should suffer a serious injury or illness which leaves you impaired, unconscious or unable to communicate or make sound decisions regarding your healthcare, you will need to have an Advance Directive for Health Care in place. If you are adamantly opposed to being put on life support or other life saving measures, this document allows you to leave such instructions and to elect a trusted individual to carry out your wishes.
Last Will and Testament:
A 2020 study by Trust and Will reported only 32% of all Americans have a Last Will and Testament in place. By creating a Will, you will be among the few who will have a say in the final distribution of hard earned assets upon death. If you have young children, you will be able to elect guardians to care for them in the event of your passing. Appointing a trusted Executor will ensure your wishes are followed and your property goes to designated beneficiaries.
Even if they do not have a significant amount of assets or an extensive estate plan, establishing a Trust can be a prudent decision for a number of reasons. With a revocable trust, you retain control over your assets during your lifetime, allowing you to manage them as you see fit. You can also make changes to the trust at any time, allowing you to adapt to changing circumstances. One of the primary benefits of a revocable trust is that it allows your assets to pass to your beneficiaries outside of the probate process. Probate can be time-consuming, expensive, and public, so avoiding it can help streamline the transfer of your assets and maintain your privacy. Since the IRS does not tax inherited real estate as income if said property comes out of a Trust, your beneficiaries will thank you.
While most people in their 20s, 30s, and even 40s may not feel pressured to get their affairs in order, estate planning is designed for unexpected life changes which without proper planning can have detrimental consequences. Professionals who have recently entered the workforce are often highly motivated, ambitious, and eager to learn and grow professionally. Estate Planning brings peace of mind, allowing you to focus on career advancement and achieving a healthy work-life balance. Our team at the Estate Planning Law Group is prepared to help you plan for the unexpected through all walks of life!
If you or someone you know is eager to get started or learn more, contact our office for a consultation today! To schedule a consultation call (718) 514-2066 or email us at [email protected].