Estate planning isn’t just for the wealthy or the elderly — it’s a crucial step for young professionals too. There are significant benefits to having a solid plan in place. You can decide to whom and how your assets get distributed if you die or can no longer manage them.
This proactive approach protects your wishes. It also helps your loved ones avoid extra problems during a hard time.
Imagine the grief your parents, family members, and friends would endure if something happened to you, especially at a young age. The added stress of navigating your estate without clear legal documentation would be overwhelming.
By making an estate plan, you can help ensure that you’re taking care of your assets and loved ones. This gives reassurance to everyone involved.
In this article, we outline seven key areas of an estate plan to consider if you are a young professional.
1. Beneficiary designations
Any financial account can have a beneficiary named on it. Naming a beneficiary helps keep the account out of probate. This is a court process that happens after you pass away. Designating a beneficiary allows the account to go directly to the person you named.
You should choose a beneficiary for accounts like retirement, checking, savings, brokerage, and investment accounts. For many, if not all of these, you typically name the beneficiary when you open the account but can change it at any time.
2. Life insurance
Having one or more life insurance policies can help beneficiaries pay off a remaining student loan balance. It also protects any dependents if you die or become disabled. Your employer might offer basic life insurance. You can add to it by increasing your coverage or buying separate life insurance. Having more than one policy can allow you to:
- Tailor coverage to different needs (for example, one for a student loan and another for a mortgage)
- Stagger term lengths to match different financial obligations
Make sure you complete your beneficiary designations for all life insurance policies. This is especially key to preventing financial hardship for your loved ones who might otherwise be burdened with your debt.
3. Digital estate planning
To avoid potential privacy law breaches by loved ones, be specific in your will or estate plan about who can access and manage your digital assets. Digital assets may include social media accounts, online storage of photos and videos, cryptocurrency keys, and email accounts.
Password protection and service agreements can create difficulties accessing accounts if you’re incapacitated or pass away. It’s also possible your accounts could go into probate or become irretrievable depending on a company’s rules or a state’s laws.
Some companies, like Facebook, let you choose an emergency contact. You can also appoint someone to manage your digital assets or delete accounts when needed.
4. Debt and student loans
Your estate may be responsible for any debt owed when you pass away. Some debts, such as student loans, may be dischargeable upon death. Federal student loans are typically discharged upon the borrower’s death, but private student loans may not be and could become the responsibility of a co-signer or your estate.
Others, like mortgages, remain with the property and become the responsibility of the beneficiary. Increasing life insurance coverage may provide additional funds to cover the repayment of any debts.
5. Incapacity documents
Choose one or more people to make decisions for you if you cannot do it yourself. Here are the main incapacity documents to include in your estate plan. They help you control who makes decisions for you.
- Financial POA: for managing financial assets
- Healthcare POA: for making medical decisions
- Living will: for specifying end-of-life care and the removal of life support
- HIPAA authorization: for allowing access to important medical information
6. End of life documents: Wills and trusts
Having a will or revocable trust helps you avoid state intestacy laws. These laws create a default plan for what happens to your assets.
With an estate plan, you can be intentional about the distribution of assets upon your passing. These documents can help you choose a guardian for your minor children. They can also help you avoid probate for your assets. Additionally, they provide asset protection for a surviving spouse or other beneficiaries.
7. Regular reviews and updates
Circumstances change over time, including relationships, financial status, and the ages of your beneficiaries. It’s important to review your estate planning documents regularly. Check beneficiary designations and financial planning documents too. This ensures they still match your needs and wishes.
Get started
Estate planning is essential for safeguarding your assets and distributing them according to your wishes. It can also spare your loved ones from handling tough issues during a hard time. You can feel confident that decisions are in the right hands.
To help make it easier for you to organize information for your family or heirs, we created a Family Records Workbook. Fill it out and share it with your loved ones. You might also find reading this article useful: Help Avoid 10 Common Estate Planning Mistakes.
At Mercer Advisors, we offer estate planning as part of our comprehensive wealth management solution, along with financial planning, investment management, tax planning, and insurance solutions. If you want reassurance that you can achieve your financial and life goals now and in the future, we can help. Let’s talk.
Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.
All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.
Mercer Advisors is not a law firm and does not provide legal advice to clients. All estate planning document preparation and other legal advice is provided through select third parties unaffiliated to Mercer Advisors. Tax preparation and tax filing are a separate fee from our investment management and planning services. Mercer Global Advisors has a related insurance agency. Mercer Advisors Insurance Services, LLC (MAIS) is a wholly owned subsidiary of Mercer Advisors Inc. MAIS provides individual life, disability, long term care coverage, and property and casualty coverage through various insurance companies. For Mercer Global Advisors clients who wish to purchase insurance products, MAIS has entered into a non-exclusive referral agreement with Strategic Partner(s), where the Strategic Partner will provide necessary services relative to the marketing, placement, and servicing of the insurance products, including without limitation preparing and presenting illustrations, supporting the underwriting process, assisting with the completion and execution of applications, delivering policies, and servicing in-force business. MAIS and the Strategic Partner will be listed as either “agents” or “co-agents” on the policies. While Mercer Global Advisors does not receive a referral fee, Strategic Partner receives a percentage of the commission revenue. MAIS and Strategic Partner do have a revenue sharing agreement.
