Most people associate estate planning with older individuals preparing for retirement or people with significant wealth. This perception can mislead people into passing up the opportunity to put their affairs in order when they still can.
Creating an estate plan at the right time can help to ensure that individuals benefit from peace of mind, knowing their financial, medical and personal affairs are managed accordingly.
Why estate planning matters at any age
By outlining how their wealth should be distributed before death or incapacitation strikes, individuals can help reduce their family’s emotional, financial and legal burden in difficult times. Some estate planning tools individuals can leverage to put their affairs in order include, but are not limited to:
- Last wills and testaments
- Trusts
- Healthcare directives
- Powers of attorney
Estate planning matters at any age because it empowers individuals to safeguard their interests and those of their loved ones. The timing of estate planning is essential because every stage of life brings new responsibilities and priorities.
Estate planning by life stage
Many individuals may not have accumulated significant wealth at a young age but likely have other critical considerations. When planning their estate, young adults should set up the following:
- A healthcare proxy to make medical decisions on their behalf
- An attorney-in-fact to handle their financial affairs if they’re unable to
- A basic will naming beneficiaries for any savings, investments or personal property
As people age, they may acquire assets such as a home, investments or retirement savings. Now is the time to:
- Create a living trust to pass assets to beneficiaries without going through probate
- Review beneficiary designations to help ensure they reflect current wishes
- Set up trusts or education savings plans to fund the children’s schooling
When approaching or entering retirement, estate planning takes on a new dimension. It’s time for individuals to fine-tune their plan to:
- Avoid tax complications
- Help ensure long-term healthcare needs are met
- Preserve their legacy
It’s also wise for individuals to have family discussions about their estate plan to avoid misunderstandings among loved ones.
Since life is full of uncertainties, starting estate planning early allows individuals to make adjustments as life unfolds, helping to ensure that they and their loved ones are always protected. By working with a reputable legal group, individuals can rest easier, knowing that no stone has been left unturned when it comes to putting their affairs in order.
