At each stage of our lives, we experience joys and challenges that are unique to that age. Young adults are navigating new-found independence, while thirtysomethings are in the throes of parenting young children. New retirees are ready to explore the world and launch new ventures, while octogenarians are looking for help with long-term care. Of course, everyone is different, but we find that most people can benefit from the same general estate planning tips and tools at each stage of life. Look at this guide as a kind of life planning calendar, and understand that you can jump in wherever you happen to be!
Young Adults: From the Magical Age of 18 Through Your 20s
While turning 18 doesn’t have quite the same meaning it had generations ago, it is still legally significant. Whether you have children who are turning 18 or you are hitting that milestone yourself, it’s important to acknowledge that an 18-year-old is legally an adult, and their parents or guardians can no longer act on their behalf. People in their 20s are graduating from college or going straight into the workforce. Given these important milestones, if you are in this decade, you should consider:
- Powers of Attorney. Since your parents can no longer make healthcare and financial decisions for you, it is smart to name someone to do this on your behalf in case you are in an accident. You might name your parents at first, and later change your agent to a significant other or spouse.
- HIPAA release. As a college student or single young person, no one will be able to talk to a doctor about your care or access your medical records unless you have signed a release authorizing medical staff to do so.
- Naming beneficiaries. Employee benefits such as retirement accounts, pension plans, and life insurance policies will ask you to name beneficiaries to receive the funds if something happens to you. In your 20s, these might be your parents or siblings.
- Will. Even if you are single and don’t have a lot of assets at this point in your life, you should have a will to express your wishes for who you want to inherit your car, house, and other valuables, as well as any other wishes or instructions you have, such as who should care for your pets.
These estate planning basics will protect you without costing much to execute.
Marriage & Children: What You Should Add in Your 30s
Estate plans should be reviewed every time there is a major life change, such as getting married or having children. The documents you signed in your 20s should be updated to name your spouse and your children after you are married. In addition, you will want to add:
- Guardians for minor children. As soon as you have a baby, you should rewrite your will to include the naming of a guardian for your children if something happens to you.
- Trusts. As you begin to build wealth, you should consider setting up a trust as an inheritance vehicle for your children. This way, you can ensure that their needs will be met and that they won’t have access to the money until you want them to have it.
Funding Trusts & Divorce: Facing Your 40s and 50s
If you have a trust-based estate plan, it is important that you continue to place assets into the trust as you acquire them in your 40s and 50s so that they will be protected from taxes and probate if you pass away unexpectedly. If your marriage has ended, you will need to once again revisit your will, powers of attorney, and beneficiaries to make sure they match your current situation. If you remarry, you will want an estate plan that protects your natural children and your new spouse. At this stage of your life, you will especially want to think about:
- Your children. As your children become adults, you should revise your estate plan to reflect that. You no longer need guardians for them, and you may not want to name them as beneficiaries of your trusts. You might also be looking for alternative ways to help them out financially.
- Your parents. Your parents are aging, and taking care of them may become challenging. Now is the time to make sure their estate plans are in order and that they have a plan for paying for long-term care if they need it one day.
Retirement Years: The Golden 60s and 70s
You might be traveling and enjoying spending your children’s inheritance in your 60s, but you should also think about your own health and what the near future holds for you. You might name your adult children as powers of attorney at this point, and you should update your will once again. You will also want to add the following to your estate plan:
- Advance directive. While your healthcare power of attorney will have the final say in medical decisions for you, this document can make your wishes clear to that person and others who may be concerned.
- Asset protection trust. If you are worried about being able to pay for a nursing home, should you need it one day, you might be able to qualify for Medicaid if you have planned ahead to meet the asset limits. An asset protection trust could be one way to accomplish that.
The Senior Years: Your 80s and Beyond
If you have stayed on top of estate planning throughout the previous decades, you should be able to kick back and relax in your 80s and 90s. You might want to transfer some of your wealth and assets now, rather than after you are gone, and you might need other tools in place to help enhance your quality of life if you are in a nursing home but, generally speaking, planning ahead means not having to worry at this stage of your life.
Whatever Your Stage of Life, We Can Help
At Ross & Shoalmire, we help people of all ages develop the estate plan that makes sense for them, regardless of the planning they may have already done—or not done. If you are 45 and have not signed a single estate planning document, that’s okay! We can help you get your affairs in order. If you or your parent needs a nursing home tomorrow and has no way to pay for it, we can help you, too. Reach out to our estate planning and elder law team no matter what your circumstances are. We are here to help.
Are You Looking for an Estate Planning Attorney in Texarkana, TX?
If you are looking for estate planning advice, you need to speak with an experienced estate planning attorney as soon as possible. Contact us online or call our Texarkana office directly at 903.223.5653. We also have offices in Tyler, Paris, Longview as well as Magnolia, AR!