Guide to Estate Planning By Age
You might think estate planning doesn’t apply to you. You aren’t old enough. You don’t have enough assets. Think again. People at every age should put together an estate plan that fits their needs – from something very simple for a 30 year old, to a fully funded trust plan for a 60 year old.
Here are the typical estate planning documents and issues to consider by age.
In Your 20s
Once you turn 18, your parents no longer have authority to make healthcare or financial decisions for you. That’s why it’s important to visit with a lawyer and get a:
Healthcare Directive – Specifies which actions should be taken regarding your health if you are no longer able to make decisions.
Power of Attorney – Names someone to make decisions for you if you can’t. There are several different types, but specifically you’ll want to consider a healthcare Power of Attorney for medical decisions and a financial Power of Attorney for financial decisions.
In Your 30s
Typically by your 30s, you own a home, have started a family, and have some financial assets. To make sure you protect your children and spouse, this is a good time to review with your lawyer which legal devices make the most sense for your situation:
Will – Specifies who will inherit your assets, who will take care of settling your estate and, if necessary, who will care for your children if you or your spouse are unable to.
Trust – Transfers ownership of your assets to someone you choose (called the trustee) and dictates who will manage your assets for the beneficiaries you designate. Trusts can include different kinds of assets, such as real estate and investment accounts. Trusts can also be set up in many different ways.
You may have heard of living trusts, revocable trusts or irrevocable trusts. To find out which one is right for you, ask Howard Law Firm today.
In Your 40s
If you have the above documents and decisions in place by your 40s – congratulations! If not, it’s time to catch up.
Now is also the time to talk to your parents about their estate plan. While these conversations can be difficult, understanding your parents’ long-term financial and healthcare wishes is usually best for everyone.
Specifically, check with your parents to make sure they have legal documentation for:
Distributing their assets (will, trust and beneficiary designations).
How medical decisions will be made if they become incapacitated, including their preferences and who can make the decisions.
Long-term care, including where they want to live and how they will pay for it. You parents may even have a long-term care insurance policy. Be sure to ask.
In Your 50s and 60s
If you haven’t done any estate planning by your 50s, you’re not alone. According to AARP, 42% of Baby Boomers do not have estate-planning documents in place.
Now is the time to get proactive and create these legal documents. Howard Law Firm can help answer your questions and work with your other advisors to get you started.
In Your 70s and Beyond
At this point, with your estate plan complete, you should focus on reviewing or updating your plan as appropriate. Make sure that your estate plan is as clear as possible and ready to be executed when necessary.
It’s never too early to start talking about an estate plan. Howard Law Firm can review your situation and help you determine the next best steps. Contact Howard Law Firm to set up your Free Consultation.