It is never too early to prepare an estate plan. Although planning for death is often the last thing on the minds of young people, the fact is that everybody has an estate, and no one can see the future. As a recent article notes, creating an estate plan is important for everyone, including young people.
Simply put, your estate is everything you own. This could be as simple as a checking account, or may also include items such as a car, home, or investments. Creating an estate plan is the only way that a person can designate what will happen to these assets upon his or her death. Otherwise the state, not his or her loved ones, will make distribution decisions. Through estate planning, a person can also achieve a maximum savings of administrative and tax costs, as well as reduce the possibility of family disputes.
The article lists three important elements of an estate plan, and describes the purpose that each serves within a person’s overall estate. The first element is a will. A will dictates who you would like to benefit from your estate, and what assets you would like each beneficiary to receive. The second element is a power of attorney. This element designates the person who will handle your financial and business affairs should you become incapacitated. The third element is a living or healthcare proxy. This element designates the person you would like to make decisions about your medical care, should you be unable to express your own wishes.
