Being an adult comes with a lot of responsibility.
In addition to the day-to-day things that teens call "adulting" like doing laundry and cooking dinner, there's a lot of long-term planning you should be doing, too.
It's easy to get wrapped up in the day-to-day tasks of living, but it's also important to spend some time making sure you're being a good friend to your future self! That means recognizing that someday you may get into an accident or pass away, and there are some very important documents that you should have in place before that happens.
Here are six documents that every responsible adult should have — even if you're just starting out in life.
1. A Will
Even if you're only in your 20s and have limited assets, a will is an important document to have and to keep updated as your life circumstances change. Also called a Will and Last Testament, this legal document will outline how your property should be distributed after you die. It can also include plans for pets, children, assets and a person to make sure your final bills and wishes are taken care of. Without a will, a court may have to make decisions on your behalf.
2. A Living Will (or Advance Healthcare Directive)
A living will is the document that will tell everyone what type of medical treatment you want (or don't want) if you get into a serious accident and cannot make your own decisions. It covers things like feeding tubes, life-saving measures and end-of-life care. It is often paired with a healthcare power of attorney document, which tells doctors who to trust with decisions.
3. HIPAA Authorization
HIPAA stands for Health Insurance Portability and Accountability Act — which is a little confusing, to be honest. The 1996 law concerns who has access to your medical information and personal information. You should decide who gets access to that information before something happens.
4. Beneficiary Designations
This one may actually be a variety of forms. You'll want to make sure that your life insurance, retirement accounts, bank accounts and other assets are assigned a beneficiary — or, who gets those accounts and assets when you die. This is often reflected in your will, but it needs to be done with each individual bank or life insurance company, too.
5. A Legacy Letter
Unlike a will, your legacy letter is not legally binding, but it can be very, very helpful for loved ones. It should include practical information including where your important documents are stored (such as where your safety deposit box is located or where the safe is in your home), passwords, contact information for your financial advisor and insurance representative, funeral preferences and other logistical information.
6. A Financial Inventory
You sometimes hear stories about children who discover "hidden accounts" and surprise life-insurance policies. No one needs that drama after you pass away. You should have a list of all of your accounts and where they are, who has access, account numbers and more so that your loved ones are able to make sure everything is accounted for properly.
None of this is particularly fun to think about, because we all want to live long, happy and healthy lives. But these documents are an important part of adulting.
If you want to talk to one of our financial advisors about these documents, we're happy to help you. We're just a phone call or chat message away and we can point you in the right direction to get started on all of these.
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