Creating a will is essential, but your estate plan should include several other pertinent documents to cover other eventualities. These include options to cover health care decisions, financial management, as well as end-of-life care, and will benefit.
Beneficiary Designations on Retirement Accounts
Many employers offer retirement accounts, or you may choose to open one on your own. You’ll be asked to designate a beneficiary in the event that something happens to you. You can name a single person or multiple beneficiaries, depending on the account. You can also choose how much of the account goes to each beneficiary.
Naming a beneficiary is something you’ll want to revisit over time. Major life milestones like marriage, children, or starting a business may have an impact on who you choose to name. A college student starting their first job may have named a parent, but as your relationships change, you’ll likely to want to update that choice.
Durable Power of Attorney
You may have heard of power of attorney, which gives someone permission to make legal decisions on your behalf. A durable power of attorney is slightly different, allowing a designated individual to make decisions for you if you become incapacitated. While this document is vital if you are injured or have a medical emergency, you’ll want to choose your representative wisely, as it grants that person full access to your finances.
Health Care Proxy (Medical Power of Attorney)
Similarly, a health care proxy empowers someone you trust to make medical decisions for you if you are unable to make them for yourself. Anyone under the age of 18 generally relies on a parent or guardian for this role, but if you are 18 or older, you’ll want to designate a medical decision maker for yourself. This can be the same person you assign durable power of attorney, or it can be someone different.
As with the durable power of attorney, you’ll want to choose someone you trust, as this person has full legal right to make medical decisions on your behalf.
Protecting Your Digital Assets
Many young adults have an extensive online presence, from social media accounts to email addresses. Including provisions for your digital assets in your estate plan can ensure their proper management after you’re gone. You can designate someone you trust to manage your accounts on your behalf in your will.
Other Individual Considerations
Living wills and long-term care plans are additional components to consider in your estate planning. A living will documents what treatment you do and do not want at the end of your life, and a long-term care plan describes your preferences for options like assisted living facilities and nursing homes.
Trusts
For individuals with businesses, significant assets, or beneficiaries who are minors, a trust is a way to manage and protect your assets. Trusts ensure your assets are allocated according to your wishes, potentially easing the management burden for your dependents and providing for those you care about.