Since no two people are the same, the approach you take to creating your first estate plan will not be identical to anyone else’s. The most important thing to remember is that you should take action as soon as possible. Drafting a comprehensive estate plan can give both you and your loved ones peace of mind — and there’s nothing more valuable than that.
Below are some simple steps for creating your first estate plan.
Write — and sign — a will
While you may decide to create a trust later in life, most people creating an estate plan for the first time find that a will is just what they need. With this, you name an executor who is given the responsibility of distributing your estate upon your death. And of course, you also name a beneficiary or beneficiaries.
Create a durable power of attorney
It’s hard to think about, but there could come a time in your life when you don’t have the capacity to make your own decisions. This is when a durable power of attorney can help. With this document in place, another person can step in and make key decisions on your behalf, such as those pertaining to health care and finances.
It’s hard to create a comprehensive estate plan when you are disorganized and have no idea what you should and shouldn’t do. Yes, it can take some time to get everything in order, but you’ll be glad that you did once you begin tackling the process.
A good place to start is to gather bank statements, pay stubs and life insurance documents together so you are able to include all of your assets. Also, don’t forget about any digital files that you need to share upon your death.
When you’re young, it’s hard to imagine that you need to create an estate plan. Instead, you assume that you have plenty of time to think about this in the future. While you may be right, it’s not a risk you should be willing to take.
It’s never too soon (or too late) to create your first estate plan. Learn more about the process, set goals and focus on your legal rights. Doing these things will put you on the right path.