Most people put off estate planning because they think they aren’t old enough, they don’t have enough assets, they don’t know where to begin or who can help them or they simply don’t want to deal with it.
But everyone over the age of 18 should have some important documents in place to protect their property, health care and family members. It’s a good idea to update these documents as life changes occur.
When it comes to estate planning, most young adults have their minds set on building careers, paying off student debt, starting families or buying a home. But the unexpected can occur at any time, and an estate plan is essential to ensure your family and friends are taken care of in the event of a serious illness or death.
Young people also often have significant assets, such as real estate and cars, or heirlooms from their families. They need to allocate these assets and name a person to make decisions on their behalf in the event they are unable to do so.
This is especially true as they get married, buy a home and add additional assets. All of these events can trigger an estate plan update to reflect changes in life.
While you’re in your 20s, many life milestones occur: marriage, buying a home, having children, and accruing financial assets. These events add to your financial and legal responsibilities, which increases the need to have an estate plan in place.
One way to do this is to create a will or trust as soon as you can. These documents will outline how you would like your financial assets distributed to inheritors, as well as who should be the executor of your estate if you die.
This type of estate planning is especially important if you have children. It ensures that your children will be taken care of if you pass away.
The survey also showed that those with more education are more likely to have estate plans in place. Those with postgraduate degrees were more than twice as likely to have a will or other type of estate planning document, while those with a high school degree or less were nearly half as likely to do so.
There is no right age to start estate planning, but it can be beneficial to do so as early as possible. Especially when there is a chance that you may become incapacitated and need help making decisions about your health and finances.
Your 40s are a good time to consider updating your documents and making changes to protect you and your family members. This can include changing your legal guardian, updating a power of attorney or a HIPAA release, and establishing new beneficiaries for your retirement accounts and other assets.
You might also consider setting up a trust, which outlines how your wealth should be distributed in the event that you die. This can be very useful if you have accumulated significant financial assets and would like to pass those assets on to your children or other heirs.
The coronavirus pandemic has helped increase awareness about the importance of completing an estate plan, and it is never too early to get your affairs in order. Taking the time to create a will and other documents allows you to communicate your wishes for how your assets should be distributed, who should make medical or financial decisions on your behalf, and how you would like to spend your last years.
60s and Beyond
Those in their 60s and beyond are typically well into the financial lifecycle, which means they can start to accumulate wealth and assets. However, they may still have many questions about the future.
Estate planning is a necessary and important part of this stage of life. It can help you leave a legacy you are proud of, and it can protect your loved ones’ financial and personal assets.
The most common estate-planning tasks are to write a will and establish a Lasting Power of Attorney, which can ensure your decisions about health care are respected if you become incapacitated. Additionally, you may need to consider a trust as a way of protecting your assets.