Estate planning is not only for the rich. Contrary to what most people believe, you can start estate planning regardless of the amount of money and assets you have. Estate planning helps to determine how you distribute your assets after your death.
It is also useful for dictating several things like where you want to be buried, specifying the legal guardian of your children, and end-of-life medical care.
Launching a probate process is important even if you don’t have assets to live behind. The government can decide who will inherit your belongings when you die. Having a will gives your family peace of mind knowing that they respect your last wishes.
So, when is the right time to start thinking of estate planning? Here is how you can start estate planning by age:
In your mid-20s
This is the prime age. You are just out of college, and maybe you’ve landed your first job. At this age, you are not anticipating death. Nobody wants to think of death at this age, but you want to plan for the unexpected.
You must have all your affairs to avoid the unexpected. Your estate plan will be quite simple at this age, which means you should not be spending a lot of money in this period. Update your estate plan as your affairs grow more complex over time.
You can plan to have the following documents as part of your estate plan:
- Durable power of attorney: This will help just if you become incapacitated, and someone you trust will have the legal authority to manage your personal affairs.
- Living will: If you become mentally incapacitated, a living will allows you to specify persons to make your medical decisions.
- Will: This is a crucial document you should have at this age because if you have children, it will specify their legal guardian just in case you die.
- Healthcare power of attorney: If you are incapacitated and you cannot make your personal medical decisions, when you have a healthcare POA in place, someone you trust will have the legal authority to make the decisions on your behalf.
Estate planning is an essential step you should make in life if you want to protect your wealth for your family once you die. An estate planning specialist can help you with the best estate planning advice and guidance to set you off.
In your mid 40s
You will also need the above documents if you are in your 40s. However, your affairs may be more complex, and your wishes should have changed at this age. For instance, if you want to change the legal guardian of your kids or revise a power of attorney, you want to make that crucial decision at this age.
You also want to establish trust as you gain more assets with age. Trust is a document that allows you to control how your wealth and assets will be distributed.
For instance, you can use the trust to control how your children will receive their inheritance funds and how they will put their inheritance towards their education. You can also avoid the probate process when you set up a trust.
In your 50s and 60s
If you start estate planning by the time you are 20 or 30, you won’t have to worry about it when you reach your 50s. Therefore, you should revisit some health-related estate planning with your age and health conditions in mind.
You want to confirm that your wishes are still in line with your will and powers of attorney. Also, if you did not begin estate planning in your 20s, you can still embark on it at this age.
Final Thoughts
Estate planning is helpful for any individuals who plan to have a family someday. If you buy a home, marry, adopt a child, or get a new job that may raise your wealth, you should not hesitate to start estate planning. You can begin estate planning in your early 20 or as late as your 50s.
