Far too often, individuals assume that estate planning is best left to those who have reached a certain age or achieved a certain level of financial security. In fact, estate planning should be completely independent of your age, health or wealth. No matter your station in life, estate planning offers a measure of control over your future as well as the peace of mind in knowing you have thoroughly expressed your wishes.
Well before retirement age, you should consider having different types of estate planning documents in place, including:
- Through your 20s: Once you officially reach adulthood, it is wise to start taking these matters into your own hands. After you turn 18, your parents no longer have the automatic authority to make healthcare or financial decisions on your behalf. By drafting a healthcare directive and power of attorney documents, you can stipulate who will make heath-based or financial-related decisions for you should you become incapacitated.
- Through your 30s: While it is not a universal time frame, many people in their 30s will have started amassing assets such as vehicles and a home. Additionally, it is not uncommon to start a family during this time. In any event, it is wise to develop your will and trust. These documents can account for who will inherit your assets and create financial protection for minor children, respectively.
- Through your 40s: During this time, you have likely landed in your chosen career, possibly started your own business and potentially purchased your second home. It is wise to revise all the estate planning documents you have drafted to ensure they are cohesive and seamlessly integrated. Additionally, now might be the time to discuss your parents’ estate plan and whether they have developed the legal documentation needed.
As you continue to approach and pass retirement age, it is crucial that you continue adding to your estate plan to ensure its accuracy. It is important to remember that estate planning documents can be revised as needed. Generally, financial experts suggest reviewing these documents every three to five years. Additionally, as you age, you might acquire more assets, change your marital status or grow your family. With every significant life event, your estate plan should be revised to account for changes.