Answer: It’s never too early to start an Estate Plan!
So what is the best age to start an estate plan? Estate Planning isn’t only for the elderly. People at every age should start an estate plan that best fits their needs. From something very simple for someone in their 20’s, to a fully funded trust plan for a 60 year-old, estate planning is appropriate for all age groups.
Here are the typical estate planning issues and documents that should be considered for each age group.
Start an Estate Plan in your 20’s
The biggest hesitation for estate planning at this age, is the belief that one has not collected enough assets to create an estate plan. But this is a misperception. Estate planning isn’t only about assets, it is also about life decisions.
Once you turn 18, your parents no longer have authority to make healthcare or financial decisions for you. That is why it is important to have a Healthcare Directive and Power of Attorney. A Healthcare Directive will specify which actions should be taken regarding your health if you are unable to make these decisions. A Power of Attorney will name someone to make decisions for you, if you are incapacitated. There are many different legal forms, but specifically you will need a Power of Attorney for medical decisions and a Financial Power of Attorney for financial decisions.
For your 30’s
This is typically the age when you start to grow your assets along with your family obligations. Even if you feel that you have not collected enough assets, you still need to start planning your estate for the future.
A Will, Trusts and Life Insurance are some key estate planning components at this age. A Will specifies who will inherit your assets, who will settle your estate, and who will take care of your children if you or your spouse are unable to. A Trust will transfer ownership of your assets to someone you designate and identify someone who will manage those assets for your beneficiaries. A Life Insurance policy will also provide additional financial support for your beneficiaries in a time of need.
For your 40’s
In addition to updating your estate planning from the previous decades, you should be adding Long-Term Care Insurance and Retirement Planning.
Long-Term Care Insurance provides a host of services that are not covered by regular health insurance. These services include personal and custodial care at home and at a health facility. These policies will vary in cost and services provided, and are an essential part of an estate plan.
Retirement Planning is an important component of Estate Planning. This is when your financial plan for retirement starts to come into focus. Retirement planning is the process of determining retirement income, and the actions and decisions necessary to achieve those goals.
For your 50’s
The best thing to have done by this stage is to have laid out a clear-cut plan on how your loved ones should proceed with your estate. All of the major components of an estate plan should created. Still, it you have not done any estate planning, you are not alone. According to the AARP, 42% of Baby Boomers do not have estate planning documents in place. It is never too late to start, so even now is the best time to start.
For you 60’s and Beyond
At this time your estate plan should be complete. Your 60’s and beyond should really be focused on updating and refining any estate planning provisions you have previously set out. You should put together a list of trusted advisors, and inform key members where to find critical estate planning documents.
As you can see, estate planning isn’t only about assets, it is also about life decisions. So starting early is the best age to start an Estate Plan.Whether you start early or late in life, estate planning is an essential part of taking care of your future and your legacy to lessen the burden for family members and to provide for your beneficiaries. When done correctly, it will provide you with the peace of mind knowing that the decisions you make today will take care of your family’s future.
Estate Planning is all about protecting your assets for your loved ones and beneficiaries. A smartly produced Estate Plan will also spare heirs a huge tax bite and eliminate family inheritance messes. MVP Law Group, A PC specializes in Estate Planning and Wills & Trusts. If you would like to learn more, then contact us at (818) 788-7881 or info@mvplawgroupla.com
