No one really likes to think about their own death. But in the era of COVID-19, it may be on your mind more than usual. And if we’ve learned anything in 2020, it’s to expect the unexpected. While we won’t always know what the future will hold, we can prepare for a number of scenarios ahead of time.
That’s the whole point of estate planning. Although it might seem like an unnecessary step to take if you’re young and healthy, the novel coronavirus doesn’t discriminate. It’s important that you be proactive about planning for a sudden and unexpected event that could render you unable to make important decisions.
Even though we hope that this worst-case scenario will never come to pass, it never hurts to be prepared. Let’s take a look at some of the most frequently asked questions that young people ask about estate planning and their best answers during the pandemic.
Why Do I Need Estate Planning If I’m Not Wealthy or Old?
A lot of young people assume that they’ll have plenty of time to figure out their plans later on in life. But we can’t always anticipate what’s to come. And if you end up passing away without a will or experience an incapacitating illness, you might find your wishes won’t be met. The truth is that only 37% of American seniors have advanced directives in place for end-of-life planning in the event of a sudden illness or incapacitation — and even fewer young people can say the same. By creating these legal documents, you can ensure that your wishes will be followed in regard to your medical care, your asset distribution, and the care of your loved ones. What’s more, you can reduce a lot of stress for your friends and family by ensuring you have this documentation taken care of in advance.
Keep in mind that you don’t need to be upper-class in order to pursue estate planning. Despite the fact that 75% of homes sold in 2019 went for below their asking price, any kind of property is still a major asset you’ll want to protect with an estate plan. Almost any kind of personal belongings can be included in your estate plan — so even if you don’t feel like you have much to give away, it’s important to spell this out in your estate planning documents to avoid having the matter settled in court.
You can also authorize someone to make your medical and/or financial decisions on your behalf, which is particularly important during this time. In addition, you can establish a guardian for any minor or special needs children you might have, as well as any pets in your possession, as part of your estate plan. Since almost one-third of families spend at least 20% of their household income on childcare, it’s important that you determine how your dependents will be taken care of in the event that you’re unable to fulfill those duties yourself.
In the end, you don’t have to be rich and elderly to have an estate plan. In fact, estate planning is for individuals of all ages and economic backgrounds. This is one of the best things you can do to ensure your desires are met and that your loved ones won’t deal with the stress of a court battle if you pass away or become otherwise incapacitated.
What’s Typically Included in an Estate Plan?
There are a few different documents that can be included in an estate plan. One of the main documents to include is your will, which is an official document that outlines the beneficiaries of any assets you own, establishes a guardian for any minor children in your care, and determines who will carry out your will’s provisions. While this document gets a lot of the glory, it’s not the only one you need to ensure your wishes are carried out.
Estate planning can also include documents that will come into play while you’re still alive, like your healthcare power of attorney and your financial power of attorney. The former (which is sometimes called a healthcare proxy) allows you to establish someone to make medical decisions for you if you’re unable to make them for yourself. The latter does the same for any financial responsibilities you may have; this could apply to anything from writing a check for a bill to running a business you own on your behalf. You may also wish to establish a living will, or an advance directive, which can include details about your end-of-life decisions (like whether you want to be placed on life support, for example) if you’re unable to communicate your wishes to others yourself for any reason.
If I Already Have a Will, Do I Need to Make Any Changes?
If you’ve already created a will or started your estate planning before the pandemic, you’re already ahead of the game. However, these documents are meant to be updated throughout your life, particularly after major changes like marriage, divorce, childbirth, family death, retirement, and more.
If you haven’t experienced any major life changes, it’s still a good idea to review your will and other estate planning documents every five years or so. And if you haven’t yet established other legal documents to go along with your will, now is a great time to take care of that.
Can I Do My Own Estate Planning?
Technically, there are programs that allow you to create your own will or other legal documents without help from an attorney. If you don’t have very many assets and your list of beneficiaries is fairly straightforward, you might be able to handle at least the draft of your will on your own. However, it’s always best to have these documents looked over or drafted from scratch by an experienced lawyer. This is especially true if you have a family, own a business, have experienced any personal complications, have any major assets, or are concerned about financial or medical issues. Although you can DIY, that doesn’t necessarily mean you should. There’s a lot you could potentially miss — and because there are certain things some documents can’t legally cover, it’s important to ensure all of your ducks are in a row.
Estate planning can sound like an intimidating concept. But really, it’s all about having your wishes followed when you’re no longer able to make sure of that yourself. By planning ahead for the worst-case scenario, you can experience significant peace of mind during the pandemic.
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