When someone passes away in Florida, their estate often has to go through a legal…
A common misconception among young adults, even those in their 30s and 40s, is that estate planning is not for them. Many young adults in their twenties and thirties often think they don’t own enough to constitute an estate.
However, an estate is the total of all you own – money, investments, real estate, vehicles, business interests, digital assets (including cryptocurrency), and other personal belongings.
No matter how much or minor, you own your possessions need to go somewhere after you die. Life is uncertain, and having an estate plan in place can help ensure your wishes are followed.
It is a myth that estate planning is just for the rich and the old.
Why Young Adults Need an Estate Plan
Estate planning is not only about distributing wealth after death. It also allows you to make important decisions about your healthcare, finances, and loved ones if you become unable to make decisions yourself.
Even young adults may have important assets and responsibilities that require planning, including:
| Asset or Responsibility | Examples |
|---|---|
| Financial assets | Bank accounts, investments, retirement plans, and insurance policies |
| Property | Homes, vehicles, and other real estate |
| Digital assets | Cryptocurrency, online businesses, social media accounts, and subscription accounts |
| Personal belongings | Jewellery, collections, family heirlooms, and valuable possessions |
For more information about protecting your assets and planning for the future, you can review guidance from the Consumer Financial Protection Bureau.
What Legal Documents Constitute an Estate Plan?
Some documents may vary depending on your wealth or financial structure; however, everyone should have a will.
At the time of your death, everything you own becomes your estate. Your estate will go through a probate process where the court will determine what happens to everything you own that doesn’t have a co-owner or beneficiary.
Because the probate court will inventory your assets and notify and pay creditors, your will is a public record.
If you have a will, the probate court will use it as a guide. In the absence of a will (dying intestate), the court will use state intestacy laws to determine who inherits your assets.
What Does a Will Establish in an Estate Plan?
A will designates two critical things:
| Estate Planning Role | Purpose |
|---|---|
| Executor | Responsible for carrying out the instructions in your will, making payments on outstanding debts, distributing assets to named heirs, and filing your final taxes. |
| Guardian | If you have dependents, your will names the guardian and backup guardian to provide care for them. |
The naming of an executor and guardian for a dependent can only happen in a will.
The Value of Establishing an Advance Healthcare Directive for Young Adults
All young adults should have an advance healthcare directive, also known as a medical directive or living will, which includes a durable healthcare power of attorney.
These legal documents specify your healthcare wishes if you are permanently incapacitated or for end-of-life healthcare. They also designate who will make those decisions on your behalf according to your instructions.
In addition, it is imperative to include a HIPAA privacy authorization form for your durable healthcare power of attorney or trustee. The form permits medical and healthcare professionals to disclose pertinent health information and medical records to your healthcare proxy.
While it may be uncomfortable to contemplate being unable to make decisions for yourself as a young adult, accidental injuries, heart disease, cancer, and strokes, to name a few, are becoming all too prevalent in young American adults.
Making plans while you are competent and able is a prudent course of action. It can bring you a sense of calm, knowing you have confronted the possibility and have a plan in place.
The Value of a Revocable Living Trust for Young Adults
Some young adults will have enough assets, real estate, or business interests to make a revocable living trust worthwhile.
This trust type avoids the probate process, ensuring privacy. There is no limit to the number of times you can amend a living trust.
You may change asset distribution or add assets as you acquire more throughout your life.
An estate planning attorney can help you determine if your financial situation and age warrant the setting up of this type of trust.
What Assets Should Young Adults Include in Their Estate Plan?
You probably have more assets than you realize. To assess your situation, inventory all of your belongings which typically includes but is not limited to:
- All bank accounts in your name and their approximate balances
- All investments you own
- Any property or real estate you own
- Any retirement plans you have, including pensions
- Any insurance policies you carry
- Any retirement plans, including pensions, you own
- Businesses you own, whether in part or whole
- Valuable personal property such as your grandmother’s wedding ring, a collection of trading cards, or a grandfather clock
- Digital assets such as cryptocurrency, income-generating online storefronts, influencer accounts, or income-producing subscription accounts like TwitchTV
- Include all email accounts, login URL’s including user names and passwords where you receive critical communications
- All outstanding debts
How to Start Creating an Estate Plan
Once you realize the scope of your belongings and assets, you can begin formulating your estate plan.
First, consider who you want to receive your possessions and think about secondary beneficiaries, especially over time, as early estate planning requires frequent reviews and updates in the event of deaths, marriage, divorce, or the birth of a child.
Once you have an inventory and have begun thinking about who should handle things upon your passing and who you want as beneficiaries, it’s time to sit down with an estate planning attorney.
Working with an experienced estate planning attorney can help you create documents that reflect your wishes and protect your loved ones.
How an Estate Planning Attorney Can Help
Estate planning attorneys like us can create a plan that best suits your situation, even if you aren’t sure what to do.
Proper legal documents can save your loved ones from an expensive probate trial should someone contest your will.
Even as a young adult, it is best to start planning now, even if it is just with some primary documents.
If you’re looking for an estate planning attorney in the Mount Dora, Florida area, please contact us at (352) 565-7737! We look forward to hearing from you!
