If you are under the age of 40, the last thing you might be thinking about is estate planning. Many young people don't think about this, because it seems like there will be time later on in life for this. Unfortunately, life is full of surprises, which is why you should begin estate planning now. As a young person, you may want to focus on the following three aspects of estate planning.
1. Caretaker For Your Kids
The first thing you will need to protect is your kids, especially if they are young. If you and your spouse were to both suddenly die, what would happen to them? Without the proper planning, your kids could end up becoming wards of the state, which means the state will decide what happens to them.
With estate planning, your first focus should be to select a caretaker for your kids. This should obviously be someone you completely trust, because it will be the person that gains legal guardianship of your kids if both of you pass away.
2. Money For Your Children
The second thing to consider is how your caretaker would support the kids if you both suddenly died. While thinking of dying is a rather morbid thought, it is something you should plan for because it could happen.
If you do not have a lot of money in the bank, you could consider purchasing a life insurance policy. You could set this up so that your kids are the beneficiaries of the proceeds, but you could take it a step further by having the money go directly into some type of trust or investment account.
You could include details that state when your kids will be able to access this money, and you could include rules about how much they can take per year.
3. A Will
The third thing you should do while you're young is create a will. This is important even if you do not own a lot of assets or have a lot of money. A will is still important, because you can use it to:
- List your wishes regarding your funeral
- State the people you select as beneficiaries of any assets you own
- Choose an executor, which is the person that will manage your estate if you die
If you keep putting off estate planning, you might reach a point when it is too late. You can avoid this by scheduling an appointment with an estate planning attorney, and this is the best way to protect your kids and your assets.