No matter your age, it’s never too early—or too late—to start thinking about estate planning.
Broadly speaking, estate planning is the process of making decisions about what will happen to your property and belongings after you die. More importantly, it allows you to plan for decisions regarding your medical care should you become incapacitated as well as who will care for any children or dependents. Thinking about what will happen in the event of your death is a difficult and easy-to-avoid task. It is necessary, though, and doing this difficult thing now can ease the transition for your loved ones if you become incapacitated or upon your death.
Anyone of any age should consider an estate plan that is tailored to your stage in life and reflects your unique situation, needs, and goals.
The Importance of Estate Planning
Many people think creating an estate plan is relegated to wealthy and/or older adults, but in actuality, estate planning is important for people of all ages, stages, and income levels.
If you own property—including a home, land, mineral interests, a car or recreational vehicle, or even personal belongings like jewelry or art—you have an estate. If you die without a will or other estate planning documents in place, state laws will determine how your assets are distributed, and that may be very different from what you want. For example, if you’re unmarried with no children, state intestacy laws may give your entire estate to your parents or other distant relatives, whether or not that’s who you want to have it. Or, if you have young children, the court may appoint a guardian for them other than the person you would have chosen.
Estate planning can help ensure that your assets are distributed according to your wishes and that your loved ones are taken care of in the event of your death or incapacity. It’s also an important tool for managing your finances and protecting yourself and your family in the event of a medical emergency or long-term care needs.
Estate Planning at Any Age
There is no perfect time to create an estate plan, but there’s also no time like the present to get started. No matter where you are in life, there are some general guidelines that can help shape your plan now and in the future. It is essential to remember that estate planning is an ongoing process and should be updated throughout your life to reflect changes in your goals and circumstances.
Estate Planning in Your Early 20s
As a young adult, you may not have many assets or any dependents to take care of. Single or married, on your own or living with parents, your estate planning needs may be relatively simple, but they are still important.
If you are in your early 20s, your estate planning should include a:
- Power of Attorney. A Power of Attorney document allows you to appoint someone to make decisions for you if you are unable to do so due to illness or injury. This document is important for young single adults because it ensures that their wishes are respected if something happens to them. For example, if you are in a car accident and are incapacitated, you can appoint someone you trust to make financial and healthcare decisions on your behalf. This can be paying bills, negotiating medical services, etc.
- Healthcare Directive. Also known as a Living Will, a healthcare directive outlines your preferences for life-sustaining medical treatment should you become incapacitated and unable to make decisions. You can also include your preferences for organ donation and pain management. This document gives everyone peace of mind that your wishes will be respected. It also ensures that your wishes are legally binding so that they will be followed even if family members disagree.
Estate Planning in Your Late 20s and 30s
As you move into your late twenties and thirties, your estate planning needs are likely to change. This is because you may have acquired more assets, you may have gotten married or entered a relationship, and you may also have minor children or other dependents. Estate planning now can help protect your property and the people you love.
If you are in your late 20s or in your 30s, your estate planning should include a:
- Power of Attorney. At this stage of your life, it’s a good time to review and update your Power of Attorney document. As a young adult, you may have initially named a parent to make decisions for you. Now you may wish to update the Power of Attorney document to name a spouse, significant other, sibling, or trusted friend instead. If you don’t already have a Power of Attorney, now is the time to make one.
- Healthcare Directive. It’s also a good time to review and update your healthcare directive–or create one–so that your wishes are documented and respected in the event of a medical emergency. This is especially important if you have a spouse or significant other or other family members who may disagree with your wishes. A healthcare directive allows you to state your wishes in the event a medical event or injury leaves you unable to communicate your wishes for yourself.
- Will. If you do not yet have a will, this is an excellent time to create one. A will is a legal document that outlines how you want your assets to be distributed after you die. It also lets you designate a guardian for your minor children or dependents and appoint an executor to handle your estate.
- Trust. Trusts can be used to ensure that assets are passed on to beneficiaries in an orderly and efficient manner. A trust can also be used to minimize taxation of assets, avoid probate, and provide for the care of minors or disabled dependents.
Estate Planning in Your 40s and 50s
If you are just starting estate planning in your forties or fifties, don’t worry–there’s still time to take care of the details. You’ll need to do many of the same tasks you would have done in your thirties, but make sure they’re appropriate for your unique situation.
If you are in your 40s or 50s, your estate planning should include:
- Creating or updating Powers of Attorney and Healthcare Directives. Name people you trust to make decisions for you and outline your wishes for medical treatments and end-of-life care.
- Creating or updating a Will and Trust. Wills and trusts become especially important as you accumulate more assets. A will ensures your property and assets are distributed as intended after you pass away, so it is important to make sure it is up to date as your life situation changes. If you have dependents or minor children, designate a guardian for them. A trust will help ensure a smooth transfer of assets and can help avoid probate.
- Reviewing your Beneficiary Designations. If estate planning has not been on your mind, one thing to check is the beneficiaries you named on various accounts. If you have bank accounts, retirement accounts, life insurance or similar assets, it is good to review your beneficiary designations. Beneficiary designations override what your will states, so it’s imperative to keep beneficiary designations up to date and make sure they accurately reflect your current situation and desires.
Estate Planning in Your 60s and Beyond
Most people begin to consider estate planning in their sixties. Generally speaking, while only 45% of people over the age of 55 have a will, nearly 81% of people over the age of 72 have one. As people get older and begin to see more life behind them than ahead of them, they may start to feel the need to protect their assets and provide instructions for their families about how to handle their estate once they are gone. As a result, they are more likely to create a will in their later years.
If you are 60 or older:
- Create or review Powers of Attorney and Healthcare Directives
- Create or update wills, trusts, and beneficiary designations
- Purchase long-term care insurance: If you haven’t already, this is a good time to look into long-term care insurance. Long-term care insurance helps cover the costs associated with long-term care, such as in-home care, assisted living, and nursing home care, that are not typically covered by health insurance or Medicare. It can help protect you, your family, and your assets in the event that you need care beyond the basics.
Keeping Your Estate Plan Updated
It’s important to periodically review and update your estate plan as your life circumstances change. We recommend reviewing your estate plan documents every five (5) years or in the event of a major life event such as:
- Marriage or divorce
- Birth of a child or grandchild
- A death in the family, a health scare, or a change in your financial situation
- Purchase or sale of an asset, such as a house
- Changes in the laws that affect how your estate can be handled
If you don’t have an estate plan, now is the time to create one. And if you already have one, now is a good time to review it to ensure it still suits your current situation.
Trust Your Estate Planning to us!
As the Law Office of Shannon D. Taylor, we know estate planning is important at any age. Without a plan (or an updated plan), you have no control over who will inherit your assets or care for your dependents.
For more than 17 years, our team has been helping Oklahomans and their families plan their estates and gain peace of mind for the future. Specializing in meeting the unique legal needs of same-sex families and the LGBTQ+ community, we work hard to ensure the legal rights and responsibilities of all families remain secure and protected through estate planning services like:
- Wills and living trusts
- Healthcare directives
- Property disputes and transfers
- Identifying financial powers of attorney and health care proxies
- Naming guardians for physical care and/or to protect and manage assets for minor children
- Making end-of-life arrangements
- Covering funeral expenses
- Probate and estate administration
Give your family the gift of a well-planned future. Contact Shannon Taylor at 405-602-8446 to schedule an appointment and start your estate planning today.
Disclaimer: This article is for informational purposes, and contains the opinions of the author based on information currently available at the time of publication. This article is written by an attorney, but it is not legal advice, nor does it create an attorney-client relationship. The contents of this article are true and accurate to the best of our knowledge, information, and belief, but there may be inadvertent omissions or mistakes. Use of this information without consulting a qualified professional is at your own risk. We would love to serve as your attorney but we do not and cannot represent you unless/until you have signed an Engagement Letter with our firm. You may contact us at 405-824-8565 or firstname.lastname@example.org.