While estate planning is often associated with individuals who are approaching retirement age, even young professionals can benefit from this process. An estate plan comprises various documents that create legal provisions in case the person dies or becomes incapacitated.
These are the key estate planning considerations during each phase of life.
Individuals in their twenties and thirties may be establishing their careers, purchasing homes, getting married and starting families. They are also accumulating assets that require protection. An estate plan at this phase should include:
- A will that indicates who will inherit assets if you die and take care of minor children if you and the other parent can no longer do so
- A trust for individuals who have assets such as investment accounts and real estate holdings
- A power of attorney, which names a person to make financial or medical decisions on behalf of someone who can no longer do so
- A health care directive, which establishes the person’s wishes for life-saving medical care
The estate planning considerations are similar for individuals in their 40s and 50s, although this age group typically has more assets to protect. Another important consideration at this age? Talking to one’s parents about estate planning. Adult children who have aging parents should know whether they have made estate planning provisions and the location of the relevant legal documents. When parents do not have an estate plan, the family can discuss their intentions for the future and come to a consensus.
Every estate planning situation varies depending on family size, assets and other considerations. However, most people can benefit from an estate plan, regardless of their current life stage.