Many people wait until they are in their 40s or 50s to begin working on their estate plans. While you are free to wait this long, it is often smarter to begin your plan when you are young. If you are in your 20s or 30s, you can start your estate plans, and you should. Here are some of the reasons you should start when you are young and tips to help you achieve an effective estate plan.

The Importance of an Estate Plan

An estate plan provides three primary things. First, it tells your family your wishes when you die. Secondly, it shows your family what to do with your things after your death. Finally, it protects the people you love.

If you died suddenly, your family would have a lot of questions, and they would have to decide the answers to these questions. They would have to determine how to handle your funeral and burial. They would have to decide what to do with your things. They may even have to decide who to give your money to if you left cash behind. Do you want your family to make these decisions, or would you prefer leaving instructions for them to follow?

The Circumstances of Young People That Require an Estate Plan

Planning an estate in your 20s or 30s is likely quite different than planning your estate when you are older. Younger people have different circumstances than older people. For example, a 30-year-old person might have a large mortgage balance to pay and may have a couple of young children. An older person, on the other hand, is less likely to have these circumstances in life. The unique circumstances of most young people create the need for an estate plan, but the things included in the plan might differ from what a 50-year-old would have in his or her plan.

How to Create the Right Estate Plan When You Are Young

Now that you see the importance of an estate plan when you are young, you might wonder what to include in yours. Visiting a lawyer is the best way to find out what you can and should include, and the lawyer is likely to give you a few tips.

The first tip is to provide a life insurance plan to your family. Imagine if you are the primary breadwinner in your family. What would happen to your family if you died? Would they struggle financially? The best way to protect your family is through a life insurance policy. Your lawyer might recommend a term-life plan, as this covers you for a stated number of years.

Secondly, if you have kids, the lawyer would recommend a plan for them if you died. Imagine if you and your spouse both tragically died in a car crash. Where would your children go? Who would raise them and pay for all the things they need? You can offer financial protection through life insurance, but you also need to name a guardian in your estate plan. The person you name would take over caring for your kids in this situation.

Finally, you should write a last will and testament. This document is what your family will use after you die to determine how to handle everything else. The paper may state how you want your assets divided, and if you wish to be cremated or buried. You can also include many other details in your will, and your lawyer will talk to you about these things.

Planning an estate in your 20s might not make sense to you initially, but hopefully it does not. Talk to an estates and trusts lawyer in your city to learn more.

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