Early Adulthood (18 - 35)
Estate planning should start as a young adult. Though people at this age often don’t think of the subject, they should. Many young adults are disabled from serious accidents or die unexpectedly every year. So parents should encourage their young adult children to begin estate planning. This gives them a head start for their future. It also reduces the risk that someone else — usually parents — will have the responsibility of their children's financial expenses if something unexpected happens.
Often, young adults will need just basic estate planning tools. These include a will stating who should receive their property when they die and a power of attorney for health care, which names a person to make medical decisions for them if they are incapacitated because of serious illness or a major accident. Also, it's a good time to think of health, disability and life insurance, and to start a retirement fund. Not only do life and health insurance cost less when obtained earlier in life, but non-cancelable insurance bought when you're healthy will help make sure you can get insurance if health problems develop later in life. Starting a retirement fund early is valuable because retirement plans can grow much higher when contributions start at a younger age.
By the time an adult marries or has children, estate planning is more important. At this part of life, others depend on you. Planning is key to addressing how a spouse will be supported, and how children will be raised if something unexpected happens, like death or disability to one or both parents.
This is the time to name a guardian in a will. The guardian will raise your children if you and your spouse die while they are minors. Without a will, a judge will select the guardian. You should also arrange to have funds in the estate to provide for your children. One way to do this is life insurance, which is another key part of an estate plan for adults with a spouse or children.
Middle Aged People (35-59)
Middle age — the 30s to 50s years — are a time of accumulating wealth. They are also years of separations, divorce, remarriage, inheritances from other family, moving out of state, running a family business, and other changes to address in an estate plan. In some ways, this is a time when careful planning or review of existing plans could be most important, because children are vulnerable if anything happens to their parents, and wealth going into the estate could be growing.
During these years, children start to approach adulthood. Some of them enter their college years and soon they will support themselves. For some people, earnings may be near their peak. For others, layoffs or job changes force them to "borrow" from savings or retirement funds. It will likely also be necessary to review insurance, particularly life insurance to provide for a spouse and children, including a child's college education.
This is a time when you should think about ways to avoid probate and lower estate taxes. To avoid probate, consider having a living trust. It can help property pass faster and at less cost than a will.
You have several options to reduce taxes. Certain kinds of trusts can help lower estate taxes. Another way to reduce taxes is to give away property before you die.
As you accumulate property, including a home, stocks, bonds and other assets, it is important to make sure that title is held in a manner that accomplishes your estate planning goals.
Seniors (60+)
At the 60s, 70s, 80s and beyond, estate planning gets more focused. Now a key step is to make sure basic elements of an estate plan — like a will and trust — are in place, and to make sure they reflect your current wishes. There may have been more family changes, such as the death of a spouse, divorce or remarriage. There may be new additions to the family, such as grandchildren or stepchildren. There may have been tax law changes that affect your estate plan made earlier. And the person you selected as executor (or trustee) when you first made your will (or trust) may no longer be available to do this job or not skilled enough to handle a larger and more complex estate. So it is vital to make sure that your will and all other documents in your estate plan are up to date.
You should also take steps to protect yourself if you become incapacitated before you die and cannot handle your affairs (this should also be done by people besides seniors). To make sure your medical decisions will be handled how you want, prepare a health care power of attorney naming someone to make your medical decisions if you can’t make them yourself. To name someone to handle your financial affairs in the event of serious illness or disability, you can prepare a power of attorney.
Also have a living will stating whether you want life support used if you in the event it's needed to prolong your life. Without a living will, agonizing family disputes can result if this issue arises.
Seniors can also reevaluate their life insurance needs. Some seniors choose to reduce their life insurance coverage based on factors like whether their spouse is still alive, their home is paid for, and their children and grandchildren are already financially secure. Other seniors maintain their life insurance, using it as an estate planning tool to leave more to their family.
Every adult has estate planning needs. These needs change at different times of life. So planning an estate is a process that should start with adulthood and continue throughout life. Our law firm can assist you with your estate planning needs whether you are young and just starting to address your estate planning or are older and may already have some pieces of your estate plan in place.
Contact an attorney at Triscaro & Associates today. Please call us for all your legal needs. We offer a full range of legal services to individuals, families and businesses, including personal injury, estate planning, real estate, family law and business matters. We are dedicated to providing the highest quality legal services at a reasonable cost.