Accidents happen. Illnesses can strike anyone unexpectedly. So, take a moment to get a few basic estate planning tasks out of the way. You — and the people you love — will be glad you did.
In your 20s and 30s, you're focused on building your life. Your thoughts center around personal goals, repaying your student loans, starting a family, and maybe even traveling and seeing more of the world. But what about estate planning?
If you think you're too young — think again. Incapacity can occur at any age. Most people prefer to have control over what happens to their belongings when the unthinkable happens. But when there's no plan in place, the state decides what happens to your assets.
Estate planning is more than just signing a will. Here are seven estate planning essentials every adult needs.
Factor Student Loans Factor Your Estate Plan
Student loans are a debt burden. Federal student loans discharge at death, so no further payments will be required — that includes federal Parent PLUS Loans your parent may have taken out to cover your university bill.
For private student loans, the decision is up to the lender. Your balance is likely to be forgiven if you took out the private student loan on your own. But what if a parent or someone else co-signed the private loan? They could be on the hook to repay the entire loan unless it's a new loan issued after November 20, 2018, thanks to a provision in the Economic Growth, Regulatory Relief, and Consumer Protection Act.
And if you took out loans after getting married, your spouse could be stuck with them if you lived in a community property state or they co-signed on your loan.
What to do
Consider buying insurance in the amount necessary to account for your debts, including your mortgage and car payments. A term life insurance policy can cover any outstanding loans and help protect your parents and spouse.