You’ve decided to create an estate plan but don’t know where to begin. You’re wondering what your plan should include, but you are unsure if you should even start a plan yet. Are you too young? Too old?
The truth is that any time is a good time to consider the future. While each estate plan should be unique, there are certain things that should be considered at each age range. What should you include in your plans at each age?
What Age Should You Start Your Estate Plan?
One of the most common questions about estate planning is when to start planning. Most professionals in the legal and finance fields agree that anyone the age of 18 or older should consider estate planning. When you turn 18, you are an adult in the eyes of the law. An 18-year-old is responsible for their own finances, their own healthcare, and their own power of attorney.
If you haven’t yet begun estate planning and are an adult, it’s a good time to start. Your estate plan should include some life events regardless of age. For example, marriage, welcoming a child into your life, and buying a home are all events that merit making or changing your estate plan.
Your plans will evolve as you change and go through different seasons of life. Once you’ve created your estate plan, you should periodically review it to determine if it’s still valid for your circumstances. Once every three to five years is the recommended frequency of estate planning reviews.
What Should Be Included in the Estate Plan in Your 20s?
In your 20s, you may be in college or likely taking the first steps in your career. Some people in their 20s are getting married. Regardless of your life choices, the planning at this stage should be relatively simple to accomplish.
Here are some of the suggestions for how to plan in your 20s.
- Write your last will and testament.
- Give a detailed description of how you want your assets to be distributed if you pass away.
- Decide on a beneficiary for your savings account and your 401(k).
- Choose a power of attorney for business and financial dealings if you become incapacitated.
- Create a living will and designate a health care proxy to handle your healthcare decisions if you can’t make them yourself.
What Steps Should You Take for Planning in Your 30s?
Your 30s bring exciting changes. You may be advancing in your career. You may have gotten married and started a family. Maybe you’ve decided you aren’t ready for children, but you’ve adopted a pet.
Have you started the process of purchasing a new house? Major life choices lead to the need to change your estate plan to accommodate the changes. Here are some of the things you will want to do to bring your estate plan up to date in your 30s.
- Update your will to include new assets and instructions for inheritance.
- Review and update any beneficiary designations for your accounts.
- Decide who should serve as guardian for your children or pets and set up guardianship papers.
- Determine what kind of deed to use to leave your house to your loved ones.
- Learn about spousal rights and be sure you understand them.
- Review existing estate planning documents and update them as necessary.
What Should You Do to Plan in Your 40s?
When you’re in your 40s, life is most likely quite different than it was in your 20s. Perhaps you’ve been married and divorced. Perhaps your children are grown or almost grown. If you don’t already have an established estate plan, it’s time to create one.
If you are just creating your plan, you’ll use the same principles to create the plan as you would have in your 20s and 30s. However, if you’ve already created your plan, it’s likely time to review it and make changes that reflect your current life.
- Review your existing will, guardianship, power of attorney, and advance directive documents. Update them as necessary.
- Update your estate plan to reflect changes in property and assets.
- Review and update your beneficiaries list.
- Remove beneficiaries from your list who should no longer inherit.
- Talk to your parents about their own estate plans.
- Consider whether a trust is a good option for your plan.
Should You Make Changes in Your 50s or 60s?
Remembering your age is the key to dealing with estate planning in your 50s and 60s. Don’t be in denial about where you are in life. At this stage of life, things like estate planning tend to feel more serious. If you haven’t already, you should get your estate plans in order, and if you have, then it’s time to make the appropriate reviews and updates.
- Set a schedule to review and update your estate plan routinely.
- Think about setting up a trust and putting assets into the trust.
- Review and adjust your advance directive to reflect your current health issues and wishes.
- Review and revise guardianship documents. Do you still need guardianship in place?
- Update your beneficiaries to include grandchildren.
- Look at investments and your financial plan. Update them as needed.
Should You Make Changes in Your 70s or Later?
When you’ve reached a certain age, you want to rest and enjoy your time. If you started your estate planning in your 20s, then you probably also made plans for your retirement. That doesn’t mean that there’s nothing for you to do in your 70s or later to keep your plans current. You should:
- Review your plan. Update it as needed.
- Make sure your plan is as clear as possible.
- Talk to your loved ones about your plan and talk to them about creating their own.
- Ensure that you have a clear long-term care plan included in your estate plan.
- Meet with the people you’ve established as your durable power of attorney and health care proxy and make sure they know your wishes and they can still serve in those capacities.
When Should You Put Assets into a Trust?
There is no set age for setting up a trust and transferring your assets into it. It is recommended that you start a trust in your 30s or 40s because, at that point, you will likely have enough accumulated for a trust to be a benefit. Many assets, including investments and real estate, can be included in a trust. Your appointed trustee will manage and distribute the assets when the time comes.
What Should Millennials Include in an Estate Plan?
Many millennials start with a simple will-based plan, but there are other documents they should consider. Powers of attorney and advance directives are essential documents to have in place, no matter your age. These documents, along with a will, create a comprehensive estate plan for a millennial.
Estate planning can seem like a daunting task. However, with a little guidance, you can create a comprehensive estate plan that covers all the bases at any age. It’s never too early or too late to plan for the future of your assets.