At What Age Should Consider Estate Planning?

Most people think that estate planning is for the elderly or the wealthy. However, this misconception could lead to unexpected consequences and missed opportunities. Life is uncertain; no one knows how long they will live or what challenges may arise. Thus, it is wise to be ready for any unforeseen events.

Estate planning is not just about making a will, designating heirs, and assigning how properties are disposed of after death. It involves other decisions that may occur after your death or in the event of incapacity.

At what age should you start the estate planning process? The short answer: as soon as you become an adult. There are also significant life events that may trigger the need to start planning for your estate.

If you need help from an estate planning attorney, call Bespoke Estate Law. We help families in Myrtle Beach, SC, Wilmington, NC, and the surrounding areas, and we would be happy to speak with you about your situation.

Young Adulthood: Age 18 Through Late 20’s

You become a legal adult when you turn 18 years old. Unless you come from a wealthy family, you may not yet have valuable assets in your name. Usually at this age, you go to college and get a degree, enter your first job, and start opening personal bank accounts.

Even though you do not own properties at this time, there are some other concerns that estate planning can address. You may want to set your healthcare directives and appoint someone to manage your digital assets.

By the time you turn 18, your parents are no longer considered your legal guardians. This means that in the event you become incapacitated, they cannot automatically make healthcare decisions for you. Thus, drafting a medical power of attorney and living will is important to ensure that your medical preferences are followed.

In a medical power of attorney, you assign an agent who shall make healthcare decisions for you in case you become incapacitated or terminally ill. The living will allows you to list your medical treatment preferences when you cannot decide for yourself.

Many people have social media accounts, online bank accounts, and cryptocurrencies in this digital age. These are collectively called digital assets that can be part of your estate planning. As soon as you have these assets, you may assign an executor to manage them after you pass.

Estate Planning During Middle Age (30s-50s)

At this point, you may have a family of your own, investments, real estate, and life insurance. This is the ideal time for you to execute a will. In the will, you list all of your properties, identify your heirs, and decide on how to distribute your properties after your death.

If you still have minor children, you may also consider drafting a trust and placing assets under the trust which are sufficient to sustain your children's financial needs until they become adults. In a trust, you can ensure that your minor children are protected financially and directly receive the trust assets after your death.

Also, you may already have life insurance and retirement benefit plans. Make sure that you regularly update the beneficiary designation after key life events, such as marriage, birth of a child, and divorce, to ensure that the proceeds go to the intended recipients. There is little that a court can do if you forget to change a beneficiary on these accounts before you pass. If you have any questions at all about setting up a trust, contact an attorney with experience in trusts. It is the best way to make sure that your future is taken care of.

Older Age (60s and beyond)

Usually, at this point in your life, your children have become adults, and you are alone or with your spouse. You may have executed all the necessary legal documents, but estate planning does not end here.

Even if you have already worked with an attorney for wills or written one through other means, you still need to review it. You should make sure that the will reflects the entirety of your estate. Also, you may need to review the designated heirs in the will and the distribution of your estate.

Minimize Taxes

After reviewing your will, consider minimizing the impact of estate taxes. To do this, you need to lower your tax base by donating to charities, giving gifts to your loved ones, or utilizing a trust to lower your estate’s taxable value. With a lower estate tax, you can pass the maximum potential value of your estate to your heirs.

Review Property Titles

It is also important to review the titles of your properties. If the properties are under a trust, make sure that the trust and the title accurately reflect this. Ensuring the accuracy of the titles and documents avoids any legal problems in the future.

Finalize Funeral and Burial Items

Finally, you can make the final arrangements for your funeral and burial plans. You may talk to your loved ones to convey your final wishes at the time of your passing. These final preparations could ease the emotional and financial stress after your passing.

Estate planning should start as soon as you reach the legal age of adulthood. With proactive planning, you can make sure your loved ones are taken care of, and your wishes are respected at the time of your death.