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Why You Need to Estate Plan When You’re Young

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Why You Need to Estate Plan When You're Young

There was an excellent article in the WSJ last week about a topic most of us don’t really want to think about (but really need to:) how to prepare in case you die young.

No one likes to think about dying and absolutely no one likes to think about the possibility of dying young. Lately it’s hit home for me, though, because two of my high school friends were diagnosed with cancer over the last year. Both are in remission now, thankfully, but it brings home the fact that it never hurts to be prepared.

Related: How to Simplify Your Financial Plan for a Happier You!

The bottom line is: if you’re old enough to be filing your taxes this month, you’re old enough to take basic steps to create basic estate documents. And yes, things will evolve and there will be adjustments to make over your – hopefully – long and prosperous life. But it’s never too early to get started.

  • The single most important thing we all need is a will and/or account beneficiaries, so that it’s clear where you want your assets to go. Statistics show that not only do most young people not have a will, but that most young parents who do have wills haven’t updated them when they had a second or third child. At the very least make sure you’ve named beneficiaries for all your bank and investment accounts (also known as TOD or  “transfer on death” provisions), to prevent having the courts probate and decide how to transfer your assets. If you need help we can connect you with our excellent network of Washington area professionals who can advise you about making the best choices for you and your loved ones.
  • If you have kids, naming guardians for them is critical, to protect them should the unthinkable happen.
  • And don’t forget yourself! My mother just had knee replacement surgery about two weeks ago and, just before she did, she handed me her advanced medical directive. I was grateful she did (she’s fine!) and your loved ones will be grateful to know what your preferences are if they ever need to make decisions for you. In addition to a life insurance policy, don’t forget disability insurance in case for some reason you can’t work. I’ve never had to use the policy I took out in my 20s but I’m glad it’s there.
  • And finally, why not create a notebook or file where all your important documents are handy? It’s a great habit to get into when you’re young. Or you could gather your documents in a tool like the online document vault our clients have access to. So take a moment and get organized – most likely you wont need it for a long time but you’ll have created a great habit for yourself.

April is a great time for an overall financial check-up: you have all your tax documents organized, which means it will be that much easier to get these important personal documents organized as well. April is also Financial Literacy Month so, as always, call us if you have questions or for a free consultation and financial check-up.

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