Estate planning is often associated with retirees and married couples with children. But the truth is, everyone, regardless of age or marital status, needs an estate plan.
What makes a comprehensive estate plan?
A well-crafted estate plan typically includes:
- Will: Specifies how you want others to distribute your assets after you die.
- Power of Attorney: Authorizes someone to decide for you if you become incapacitated.
- Healthcare Proxy: Appoints someone to make medical decisions on your behalf if you cannot do so.
- Living Will: Outlines your end-of-life care preferences.
- Beneficiary Designations: Ensures your retirement accounts and life insurance policies go to your chosen beneficiaries.
Even if you are young and single, creating an estate plan is essential. It is not just about what happens to your assets after you die. It can also be an incredibly potent tool to protect you during your lifetime.
Why does estate planning matter even for young and singles?
You may be surprised at your accumulated assets, even at a young age. These can include a savings account or investments, a car or a home or condo. You may also have digital assets, like social media accounts or online storage, or personal belongings, such as jewelry or electronics.
In New Jersey, if you die without a will (intestate), the state decides how to distribute your assets. For single individuals without children, parents often inherit everything. If you would prefer your assets to go to siblings, friends or charities, you need an estate plan to make that happen.
Aside from distributing assets, an estate plan can help manage student loans, credit card debt and other financial obligations if you cannot. You may also have specific medical treatment wishes, like organ donation or life-sustaining treatment. An estate plan addresses all these aspects according to your wishes.