Estate Planning Tips for Every Age

mother and daughter working on estate plans

It can be difficult and even upsetting to plan for the unthinkable but putting some forethought into your estate planning can bring added comfort to what often is thought of as the “bureaucratic side of death” that your loved ones will experience should you pass away.  No matter what age you are, there are some things you can do to start documenting your final wishes and the kind of legacy you leave behind.

 

There are incremental steps you can do at certain ages and stages of life to make an estate plan, and these steps will make the planning process far less daunting.  Here are some expert estate planning tips for every age, from your 20s through your 60s and beyond.

Estate planning in your 20s

You may not have many assets in your 20s, but your estate plan should, at the very minimum, include using beneficiary designations on your financial assets (and even your home if applicable using a Revocable Transfer on Death Deed).  In addition, you should ensure you have a financial power of attorney and healthcare power of attorney (POAs) in place to ensure if you’re injured, but not deceased, from an unexpected life event, you have the people you know and trust managing your financial or medical care decisions for you until you regain the capacity to handle those matters yourself.

POAs play a critical role for anyone at any age thinking of his or her estate plan.  Your healthcare agent (also known as an attorney-in-fact) under your healthcare (or medical) POA is someone you choose to make medical decisions for you should you become unable to do so.  This document can also include a healthcare directive or living will, which documents your end-of-life wishes if your injuries or medical condition become terminal and, in effect, irreversible (i.e., brain death).   Your agent acting under your financial POA is someone who handles all financial matters, your mail, your taxes, and even (if applicable) business affairs if you are unable to handle them yourself.

In selecting a person to serve as your agent for a healthcare POA or a financial POA, you should select someone you not only trust but, also, someone who you feel is organized and sufficiently savvy to manage (or employ others if needed to help manage) your affairs.

As for your Will, if you don’t have major assets, a spouse, or children, a simple Will may be enough to cover what you currently have.  However, it’s advisable to consult with an experienced attorney to find out whether this would be sufficient and whether avoiding probate entirely by using a different approach to your particular estate plan or assets is important (e.g., Do you need to provide for a pet or pets?  Do you want to be sure that what you leave can pass to a specific family member who has special needs and is not able to manage what you leave them personally should they inherit directly from you?).

Estate planning in your 30s

Many people in their 30s have a long-term partner or are married.  They may also own a home, have children, and have more substantial assets.  When you need to consider protecting and providing for someone other than just yourself, it’s even more critical to prepare a well-thought-out estate plan and periodically review that plan to ensure you address any important changes in your life, your spouse’s life, or your children’s lives.

It may be a good time to determine whether a trust, sometimes called a Revocable Living Trust, is a better tool to use than just an ordinary Will, especially if planning for young children to ensure they are not only protected but that someone can provide for their day-to-day needs should you and your spouse no longer be alive.

Unlike assets left to beneficiaries in a Will, a trust protects assets owned by the trust or made payable at death to the trust from going through probate.  It offers greater flexibility to provide for any minor children, while also controlling what happens with inheritance for children over 18 but not old enough (in many parents’ minds) to receive all of their inheritance at once.  A trust can also be a useful tool to provide for the care of a beloved family pet (or pets).  If you do have minor children, you will also want to grant power of attorney for a minor child or designate a standby legal guardian for them as part of your estate plan to ensure that if you and your spouse both become incapacitated and unable to care for them due to a medical or another issue, you have a trusted family member or close friend empowered to step in and protect your children’s interests.

Estate planning in your 40s

Many people begin accumulating more wealth and assets throughout their 40s.  At this stage, it is a good time to start talking to family members about your plans.  These conversations will be some of the most difficult discussions of the entire estate planning process. However, it’s better to start them early than leave your family in the dark about your estate plans.  Make sure to inform your loved ones of asset distribution and your wishes for medical decisions and long-term care if you develop a health condition.

Additionally, put together a list and folder of important records and documents that disclose where an executor for your Will or trustee for your Trust can locate your assets, and indicate if there is a designated beneficiary on such assets.  Include that person’s full name, date of birth, address, mobile number, and relationship to you (if needed).

Estate planning in your 50s

By the time you reach your 50s, you may want to look at estate plans made earlier in your life and update them to account for any life changes you may have experienced.  Perhaps you sold a home, got divorced, or now have grandchildren with whom you’d like to share your estate.

Ensure that all documents, including your payable on death accounts (like a retirement savings plan) and powers of attorney, are up-to-date, and that you have clear plans outlined for how your loved ones should handle your affairs in case of incapacitation.

Preparing a folder or binder with all the necessary information, contacts, and documents in one place can help loved ones navigate your affairs.  Many individuals even include a step-by-step guide to minimize difficulty and stress for their loved ones, especially if it would be their first-time being responsible for someone else’s legal affairs.  This includes caretaking instructions for young children and family pets.

Estate planning at 60+

By the time you’re age 60 or older, your estate plan should all be in order.  Beyond this point, it is wise to periodically review your documents for any possible discrepancies and update them as needed, especially if your health takes a turn or your family or financial circumstances change.  This kind of regular maintenance can help address changes before they become emergencies.  That way, your loved ones will know what to do when you pass away, and you can feel secure in the knowledge that your family will take care of your assets and distribute them according to the wishes set forth in your Will, Trust, or other estate planning documents.

However, if you have not yet gotten a chance to prepare your estate planning documents, you should prioritize them.  Although this may seem a daunting task, you can ease the process by consulting a lawyer experienced in estate and trust planning who has helped thousands of clients with working through things step-by-step to help prepare the necessary documents.

Estate planning at every age in Virginia

Regardless of your age, your estate plan should always include an inventory of your tangible and intangible assets, your list of beneficiaries as well as what they should receive, and your financial and medical powers of attorney.  In Virginia, you will need to have these items in writing and signed by two witnesses, and typically all of you in the presence of a notary public.  Different copies of your documents can be kept in a safe place in your home, with your lawyer, and with your appointed health care POA agent, financial POA agent, executor, and (if applicable) the successor Trustee to a Trust.

Tangible assets can be any property you own, like furniture or jewelry, while intangible assets can be intellectual property or bank accounts.  Consider any risks to your assets, such as overdue mortgage payments or property taxes.  Your estate will need to cover those costs, which you should factor into your planning.

Depending on the size of your estate, the executor of your Will may have to contend with federal estate taxes, so plan ahead for those in the preparation of your estate plan. Although Virginia does not place an inheritance tax on those who live in the state when they inherit, you may have to consider an inheritance tax if your beneficiaries live outside of Virginia. To plan for those instances, look into the inheritance tax laws in the actual states your beneficiaries live in.

Get help with your estate plans at any age

Whether you’re creating your first Will or updating an existing estate plan, the Law Office of Patricia E. Tichenor can help. We’ve been serving Virginia residents for 20 years and can advise you on the best estate planning tools for your current assets and needs. Contact us to schedule your complimentary consultation today.

Categories

More
articles

6 Reasons Not to ‘DIY’ Your Estate Plans

Do-It-Yourself (DIY) estate planning is often the first considered option for those looking to save money. However, because of the complexity of estate planning laws,