Everything You Need to Know About Estate Planning—and Why You Should Start Now
When you plan for the future, estate planning might not be at the top of your list—but it should be. Estate planning involves deciding how you're going to dispose of your assets when you die, and while this isn't the most fun topic to talk about, it is an important conversation to have. Estate planning among young adults has increased over the past year, too—and rightfully so. A survey by Caring.com, a platform for caregivers, found that the number of young adults (18-34) with a will increased by 63 percent since 2020.
"We had the busiest year we've ever had in 2020, because of the pandemic," says Lori Anne Douglass, cofounder of trust and estates law firm Douglass-Rademacher LLP. "Suddenly, people were just dying out of nowhere, of all ages." Douglass said 2020 was a wake-up call for many to start the estate planning process. "The basic estate plan includes not only documents for when you die, but documents for if you become disabled; your medical and financial directives. A will is just one little piece of it," says Douglass.
If you don't know where to start with the process, or what you should do, the important thing to know is that there are plenty of resources and people out there to help you navigate estate planning. For BIPOC communities, the opportunities that estate planning provides for wealth accumulation and building generational wealth make it even more important to look into. If you don't decide what you want to happen to your wealth, the courts will.
"Truly, if you really want to create generational wealth, you're not going to get that unless you're setting out your plan for the wealth that you want to transfer," says Jala Eaton, a licensed attorney in California and a certified trust and financial advisor. "If you don't, there are default rules." Here's what you need to know about estate planning—and why it's a critical part of your future.
At the end of the day, remember that estate planning is just a plan—it's what you would want to happen. "You're thinking about what you would want to happen before it happens, if it happens at all," says Eaton. Do your research, start early, and update your estate plan regularly—so you know your financial future will be secure even after your time.