Estate-Planning Documents for Young People

Most people don't think about estate planning until they're much older. Even young people, however, can benefit from a few key legal documents that give you the opportunity to specify who will inherit your assets and who can make medical decisions if anything happens to you. Consider the following documents at any age, and make sure to update them whenever you have life changes - such as if you get married, divorced, have kids, or if your wishes change.

A will. Even if you don't have a lot of money, having a will lets you determine what happens to many of your assets after you die. Without it, your assets pass to your relatives according to state law. It's particularly important to have a will if you've been divorced and remarried but want to make sure your kids from your first marriage inherit some of your assets. It's also important if you'd like to donate some of your estate to charity. If you have minor children, you can also designate a guardian and set aside money in your will to help them raise your kids if you die when they're still young.

Beneficiary designations. Your retirement-savings accounts and life insurance proceeds go to the beneficiary you designate, no matter what your will says. Check on your beneficiary designations and make sure they're all up to date, especially if you get married, divorced, or have kids. Your family situation may be very different now than it was when you first started your job and enrolled in the plan.

Health-care proxy and living will. A health-care proxy lets you designate someone to make medical decisions on your behalf if you're incapacitated. A living will lets you specify your wishes for end-of-life care. Some states combine these two documents together in an "advance directive for health care." See the American Bar Association's Giving Someone Power of Attorney for Your Health Care guide at www.americanbar.org.

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