At What Age Should You Make an Estate Plan?
June 21st, 2022
If you’ve spent any time at all reading law blogs, you may have noticed that they often follow a certain format. The blog will ask a question, answer it with “it depends,” and then go on to talk about just what the answer depends on. It’s refreshing to be able to give a more definite answer about the best estate planning age. The best age to make an estate plan is eighteen. The second best age is however old you are right now.
You might be surprised to hear that an eighteen year old should have an estate plan. After all, most eighteen year olds have few assets and a long life ahead of them. While that may be true, estate plans aren’t just for the wealthy, nor just for those who are in their golden years. Of course, those people need estate plans, too; they might just look different.
What’s the Best Age to Start Estate Planning?
Part of the reason we say that the best stage to estate plan is eighteen is because that is the age of legal adulthood. The other part of the reason is that estate planning isn’t just about property and what happens to it after you die. Estate planning is also about exercising control over your life, including who will make decisions for you if you can’t make them for yourself. Anyone, at any age, can be incapacitated by a sudden illness, accident, or injury. Therefore, anyone should have a legal plan in place regarding who should make decisions for them in those circumstances.
The question we really need to answer in this blog post is not “What’s the best age to do estate planning?” but “What should my estate plan look like, given my age and life circumstances?”
Estate Planning for Young, Single Adults
When you’re in college, or just starting out in your career, you may not have a lot of assets or young children to provide for. Your primary estate planning concerns are who will make medical and financial decisions for you if you become unable to make them for yourself, and who will inherit your property should you meet an untimely death.
Your estate plan can be relatively simple: a simple will, a durable financial power of attorney, and advance healthcare directive. Of course, if you are a young single parent, you will want to name a guardian for your child in your will. You may also want to create a living trust so that if anything could happen to you, a trustee of your choice could manage your child’s inheritance until they reach adulthood.
Estate Planning for Young Married Couples
By your late twenties and early thirties, your estate planning needs may have changed. You are becoming established in your career and likely have more assets, and you may have a spouse and young children whose future you care about.
Like any adult, you and your spouse need to think about who will make financial and medical decisions for you if either of you becomes legally incapacitated; most married people want their spouse in that role. You also need a will to name your preferred guardian for your children; you wouldn’t want family members fighting over “who gets the kids” in the wake of your loss. You may also want a revocable living trust to protect your children’s inheritance while they are growing up.
Estate Planning in Middle Age
As you move into middle age, your estate planning priorities continue to evolve. Your children are reaching adulthood, so you may no longer need to name a guardian for them in your will. However, even if they are legally adults, you may not feel that they have the maturity to handle receiving their inheritance all at once—especially if your assets have grown and that inheritance is likely to be large. If you don’t already have a trust in place, now is definitely the time to consider one.
Depending on the size of your estate and the needs of your beneficiaries, you may need a trust designed for tax planning, protection against creditors, to provide for a child with special needs, or for some other specific purpose. And, as at any age, you should have a durable financial power of attorney and advance medical directives.
At this age, you may have seen a parent or older friend have to sacrifice their life savings to pay for nursing home care, so you should also talk to your estate planning attorney about long-term care planning.
Estate Planning for Seniors
As people age, thoughts about protecting their assets from the nursing home becomes a bigger concern, as does the legacy they will leave behind for their loved ones. In addition to updating wills and trusts to reflect new grandchildren or great-grandchildren, older individuals may want to create an “ethical will”—a document that transmits not financial assets, but wisdom and values to younger generations.
Senior citizens have lost friends and family members and have thought about their own eventual passing. If they have not already created advanced healthcare directives, including those regarding end-of-life care, now is the time to do so. As people age, the risk of developing dementia increases, and so it is also increasingly important to have a durable financial power of attorney in place.
When to Update Your Estate Plan (Regardless of Age)
Naturally, the categories above are just approximations of where most people are with regard to their estate planning needs at a given stage of life. An individual might become a millionaire at 25, or a first-time parent at 45. So the most important driver of estate planning should be what is going on in your life at that point.
In general, any major life change should at least prompt you to reconsider your estate plan. Having a child, getting married, receiving your own inheritance, or getting divorced are examples of good times to pull out your estate plan to decide if it still meets your needs.
If you have questions about making or updating an estate plan, or wonder what your estate plan needs to include, please contact Mundahl Law to schedule a consultation.
Categories: Estate Planning