Why Every Young Adult Needs an Estate Plan: Essential Documents for Peace of Mind

Estate planning may not seem relevant to you if you’re just starting out in adulthood. Many people assume it’s for older individuals or those with substantial assets. But estate planning isn’t only about passing down wealth; it’s also about ensuring someone you trust can make decisions for you if you’re unable to do so. Life can take unexpected turns, and even young, healthy individuals can benefit from a few essential documents that provide protection and peace of mind.

If you’re wondering what estate planning could mean for someone without a house, kids, or a large investment portfolio—let’s break it down. Here are the key documents every young adult should consider and why they matter.

Why Estate Planning Matters for Young Adults

Think of estate planning as a way to stay in control of your own well-being. As an adult, no one has the automatic right to make decisions on your behalf if you’re incapacitated—not even your parents or partner. Without the proper legal documents, your loved ones might face hurdles just getting information about your medical status or accessing funds to cover bills. Estate planning ensures the people you trust have the ability to act for you when you need it most.

Imagine this scenario: you’re in an accident and unable to make decisions for yourself. Without a healthcare power of attorney (POA) in place, your family or partner could struggle to get involved in your medical care. A well-thought-out estate plan provides that access, ensuring decisions can be made smoothly and that your wishes are respected.

Key Documents Every Young Adult Should Have

If you’re ready to lay down the basics of your own estate plan, here are the most important documents to start with:

Healthcare Power of Attorney

A healthcare power of attorney (POA) designates a trusted person to make medical decisions on your behalf if you’re incapacitated. This can be invaluable in a crisis, as it allows your POA to communicate directly with doctors, approve treatments, and ensure your healthcare wishes are followed.

Without a healthcare POA, loved ones may face legal challenges in accessing your medical records or making decisions on your behalf. It’s a straightforward document that doesn’t take long to set up but provides essential protection.

HIPAA Authorization

This one is easily overlooked, but it’s crucial. HIPAA (Health Insurance Portability and Accountability Act) privacy laws protect patient information, and without a HIPAA authorization, even close family members may be unable to get updates on your health status.

A HIPAA authorization gives your designated contacts permission to access your medical information and speak with healthcare providers. It complements your healthcare POA by allowing trusted individuals to stay informed and involved in your care.

Financial Power of Attorney

A financial POA grants someone you trust the authority to manage your finances if you’re unable to do so yourself. This can include paying bills, managing investments, handling bank accounts, and even making sure rent or mortgage payments are met.

While autopay might cover some basic expenses, there are financial decisions and actions that require a person’s involvement. For example, handling a bank transfer, communicating with a landlord, or managing unexpected expenses could all require your POA to step in.

Living Will

A living will outlines your preferences for life-sustaining medical treatments. This document lets you specify the types of care you would (or would not) want if you’re facing a serious illness or injury and unable to communicate.

While it’s not the easiest topic to discuss, a living will provides clear guidance for your healthcare POA and medical team. This removes any ambiguity about your wishes and helps loved ones make the best choices on your behalf, knowing they’re following your directions.

Simple Will

You may not have significant assets yet, but a simple will can still be beneficial. It allows you to designate beneficiaries for your belongings, assign a digital executor to handle your online presence, and clarify your wishes for sentimental items.

A will can also be used to outline your preferences for pets, personal effects, or specific possessions that have meaning to you. If you pass away without a will, your belongings could be distributed according to state law rather than your wishes.

Don’t Forget About Digital Assets

We live in a digital world, where everything from our bank accounts to our photos lives online. If you want your digital accounts managed—whether that means memorializing a social media account, securing a cryptocurrency wallet, or simply closing down various subscriptions—plan for it in your estate documents.

Consider naming a digital executor who can access your accounts, retrieve important information, and carry out your instructions. You can provide access information and specific directions for managing each account, which will help loved ones avoid confusion and ensure your digital life is handled appropriately.

The Importance of Reviewing and Updating Your Documents

Life can change quickly, and your estate planning documents should evolve along with it. You’ll want to revisit your healthcare and financial POAs, will, and other documents as you experience major life events, such as a move, new job, or marriage.

Establishing a regular review process—say, every few years or after major life changes—keeps your documents relevant and ensures your choices continue to align with your current situation. An estate plan isn’t a “set it and forget it” task; it’s something you update as life changes.

Getting Started: Taking the First Steps

Beginning an estate plan might seem overwhelming, but it doesn’t have to be. Start with one or two of the most essential documents, such as a healthcare POA and HIPAA authorization, and gradually add the rest over time.

Consulting with an estate planning attorney is often the easiest and most effective way to get these documents in place. They can guide you through each step, help you choose the right individuals for various roles, and make sure everything is legally sound and tailored to your needs. A professional can also answer questions and give personalized advice, so you know your choices will hold up if they’re ever needed.

Taking Control of Your Future

Estate planning may not be at the top of every young adult’s to-do list, but it offers a sense of security and control that’s well worth the time. Establishing a few essential documents now can give you and your loved ones peace of mind, knowing that no matter what life brings, you’re prepared. And, as you build your life, you’ll have a foundation in place that can grow and adapt alongside you.

Taking control of your future doesn’t require a complicated or expensive process. Just a few simple steps today can make all the difference down the road.