Too many people think that having a will and an estate plan is only necessary for wealthy people to have heirs, own businesses, or vacation in second homes.
However, regardless of the value of your assets and possessions, as a lawyer, the most excellent time to begin an estate plan is right now.
It would be best to begin considering estate planning at no specific age. If you don’t have a plan, the government will select who receives your possessions following a time-consuming and expensive probate process.
A straightforward will can provide your family members with peace of mind and the assurance that they are following your directions in the future.
I’ll go over all you need to know about when to start estate planning in this article.
When Is an Estate Plan Required?
Many financial advisors suggest creating an estate plan as soon as you become a legal adult and updating it every three to five years.
It is because, at 18, you become legally responsible for your finances, healthcare decisions (in some places), and power of attorney. Regularly checking to make sure things are in order is essential.
What Is an Estate Plan?
The estate planning process involves drafting several legal agreements which will affect you while you are living and what happens to your property after your disappearance.
Most people know that a will is included in an estate plan, which outlines how to distribute their goods and assets after death.
A will also enable you to designate a guardian of your minor children and the executor to handle the business after you die.
An estate plan includes other legal documents which you could need at any time without notice. A living will, also known as an advance directive, describes your wishes for medical treatment, such as feeding tubes and life support, if you become incapacitated.
What should you consider when estate planning?
Estate planning is arranging your affairs to ensure that your assets are distributed according to your wishes after your death, as stated above. When considering estate planning, there are several important factors to consider. Here are some key considerations:
- Goals and objectives. Determine your overall goals and objectives for your estate plan. It could include minimizing taxes, protecting your assets, or ensuring your loved ones are cared for after you pass away.
- Assets and liabilities. Take stock of your assets, including real estate, investments, retirement accounts, personal property, and any debts or liabilities you may have.
- Beneficiaries and heirs. Consider who you would like to inherit your assets and how you would like them to receive them. Name specific beneficiaries, set up trusts, or make charitable donations.
- Executor and trustee. Choose someone you trust to serve as the executor of your will or the trustee of any trust you create.
- Taxes. Understand the tax implications of your estate plan, including federal and state estate taxes, gift taxes, and income taxes.
- Health care directives. Create a living will or health care power of attorney to ensure your wishes are respected if you become incapacitated.
- Legal documents. Create legal documents such as a will and trust to help ensure your wishes are fulfilled after your death.
- Regular review. Regularly review and update your estate plan as your circumstances change, such as marriage, divorce, the birth of a child, or a significant change in your financial situation.
By considering these factors and working with an experienced estate planning attorney like at The Law Office of Roger A. Giuliani, P.C., you can produce a thorough plan that safeguards your assets, minimizes taxes, and assures that your loved ones are taken care of according to your wishes.
What Happens to My Assets After I Pass Away?
All unpaid debts are the responsibility of the deceased person’s estate. When a person dies, their estate inherits their assets.
After you die, the probate process involves paying off all your debts and distributing whatever assets remain within your estate to the beneficiaries.
If you don’t have a will, your state’s intestacy laws will determine who gets your belongings.
If no relatives are found, the state often inherits your entire estate, including bank accounts, IRAs, and retirement funds.
When to Name a Guardian
Consider who you will designate as the guardianship role of your first child if something unforeseen happens.
Even though most new parents would instead not consider this, it’s crucial to document it.
Typically, you name a guardian when you create a will.
Remember to update this paperwork each time you have a new baby, as it is crucial.
You can get assistance from Reliable in this procedure. You can easily view, share, and edit your documents by logging into your account.
When to Create a Will
When you reach the legal age, writing a will is the best time.
Sadly, many people pass away in America without a will.
Family members are left to deal with losing a loved one while also being in control of numerous decisions they may not have given much attention to.
By naming a healthcare proxy, appointing an agent, and specifying how your assets will be distributed, creating a will may help prevent this situation.
When to Make a Trust
If you have significant assets, like real estate and other assets, it can be wise to establish your trust.
With trusts, you can avoid going through the probate process and have more control over how your assets are distributed both during your life and after you die.
Additionally, creating a trust allows you to transmit your assets to several beneficiaries without incurring additional taxes or fees.
Creating a Power of Attorney
A power of attorney enables someone else to handle your financial affairs when you cannot, including managing your money and paying your payments.
These agreements allow you to decide what will happen to you and your affairs for the rest of your life if you cannot make decisions for yourself.
Preparing for Incapacity
Some people view estate planning as a process that requires completion to prepare for the aftermath of their death. Estate preparation, however, must include documents that will be useful in case of your incapacity.
You can appoint someone with the aid of financial power of attorney if you are unable to manage your finances on your own. That can take effect as soon as you sign it, or it may “spring,” meaning it applies once you lose the ability to do so.
Ask about any guidelines or limitations your financial services provider might have regarding accepting revocable powers of attorney.
A power of attorney on health care (also known as a “health care proxy”), a living will, and a HIPAA authorization (a thorough document that guarantees the privacy of your medical records) are all legal agreements that let someone make critical medical decisions on your behalf.
If you still need these documents, consider hiring a lawyer to prepare them. You should name a backup when the first person you choose cannot serve.
If you possess these documents, check them to ensure the person(s) listed on them is still acceptable to you. Then, please consult with your attorney to update them to reflect your preferences accurately.
Who Should Consider Estate Planning?
Estate planning is a necessary procedure that everyone ought to think about, regardless of their age or financial status. Creating a plan that outlines how your assets will be distributed after your death and who will manage your affairs is what estate planning involves. Here are some specific groups of people who should consider estate planning:
- Parents with Minor Children: If you have children who are minors, estate planning is crucial. You need to ensure that they will be cared for and provided for if something happens to you.
- High Net Worth Individuals: Having an estate plan in place is crucial if you have a significant amount of assets to ensure that your assets are distributed per your wishes and that your heirs are protected from unnecessary taxes and legal fees.
- Business Owners: If you own a business, estate planning is essential to ensure that your business can continue to operate smoothly after your death and that your assets are protected.
- Individuals with Specific Wishes: Estate planning can help fulfill your specific wishes for asset distribution after your death.
- Elderly Individuals: If you are getting older, estate planning is vital and could benefit you to ensure your assets are protected and your affairs are managed following your wishes.
Everyone should consider estate planning, regardless of age or financial status, as it is a critical process that ensures that their assets are distributed according to their wishes and that their loved ones are protected after death.
When Should You Start Estate Planning
Many experts suggest creating an estate plan immediately as you are of legal age and keeping it updated regularly (or whenever significant life events occur).
Here is a breakdown of estate planning by age:
In your 20’s and 30’s
Nobody in their 20s or 30s likes to consider death, but you should be ready for everything.
Despite the impossibility, organizing your affairs in case the unexpected occurs is a good idea.
You are not required to spend much money on your estate plan because it will likely be relatively simple. As your affairs become more complicated, you can revise this plan accordingly.
Include the following documents in your estate plan at this time, regardless of your assets or wealth, and prepare them:
- A healthcare power of attorney: Obtaining a Healthcare POA ensures that, in the event of your incapacity and inability to make decisions for yourself, someone you trust will be legally able to act on your behalf.
- A durable power of attorney: If you become incapacitated, a durable power of attorney will give a trusted individual the legal authority to manage your personal affairs, speak on your behalf, and make payments on your behalf.
- Will: If you’ve children, you must have the will to name a guardian if they are minors. You can also leave property to unmarried partners that wouldn’t otherwise be eligible for inheritance by using a will.
- A living will: A living will allows you to state your intentions regarding your medical treatment when you become mentally incapacitated. It is distinct from a healthcare POA, which delegates decision-making power to another person. A living will ensure that your desires are carried out if you are given a fatal medical diagnosis or become mentally incapacitated.
In your 40’s
The same documents remain equally vital as you get closer to 40. Your current situation can be more complex, and your goals might change.
You could want to change the person designated as your children’s legal guardian or alter your power of attorney, for example. In your 40s, you must update this documentation.
If you acquire additional assets, consider setting up a trust. You have more control over allocating assets when you use a trust.
With the help of a trust, you can impose restrictions on your children’s inheritance, such as the need to utilize the funds for their education or the choice of when they get it.
Furthermore, setting up a trust will assist you in avoiding probate.
In your 50’s and 60’s
If you begin estate planning during your 20s, you will be relaxed by age 50 or 60. Make sure of your estate planning documents involving your healthcare, given your current health issues and age.
Reviewing your living will, and any current powers of attorney, is a good idea to ensure they still appropriately reflect your intentions.
If you didn’t begin estate planning in your 20s, there is always time to do so. If you still need to do so, organizing the paperwork mentioned above at this point in your life is more important than ever.
Don’t Wait! Start Your Estate Planning Today!
Starting estate planning early is always a good idea if you want to ensure that your assets are distributed per your wishes and that your spouse or loved ones are cared for after you die or at your funeral. The earlier you start, the more time you have to adjust as your circumstances change.
Whether you’re a young adult just starting your career or a retiree enjoying your golden years, estate planning can provide peace of mind, knowing that your affairs are in order. Take the first step towards securing your legacy and contact our law firm at The Law Office of Roger A. Giuliani, P.C. Our estate planning attorney will guide you and advise you on your long-term estate planning needs.
If you have questions or want more information, don’t hesitate to call us at (702) 388-9800 or set an appointment or consultation with us.