As you travel through different stages of your life, you may not require the same estate plan. Estate plans are based in part on the phase of life you are in. An estate plan you created when you were in your 30’s could be very different from the one you need in your 60’s.
1. Young and Single. When you are in your 20’s, all you probably need is a Durable Power of Attorney for Finances and an Advance Health Care Directive. Both of these documents are ones you need if you become incapacitated. If you are single, this probably means that you name your parents to make financial decisions if you are unable to and give them the power to make medical decisions for you in the event of a temporary or permanent incapacity. Once you purchase your first home, however, it is time to create a will or a trust as the centerpiece of your estate plan.
2. Newly Married. Upon your marriage, you will probably want to name your spouse as your agent on your durable power of attorney for finances and your advance health care directive. If you haven’t already, you should also create a revocable living trust and name your spouse as the beneficiary of your 401(k), life insurance policies, pension or retirement plans.
3. Married with Children. Once children come into your life, it is time to amend your trust to provide for your minor children should something happen unexpectantly to both spouses. You should make provisions for how your estate would be distributed to them and also nominate guardians to raise them. Beneficiary designations on life insurance policies, pension plans, etc. should also be updated to cover a situation where both parents die simultaneously.
4. The Middle Ages. During these years, your trust should be updated as changes occur in your life such as divorce, additional children, changes in financial situation, inheritances or substantial increase in net worth, or death of a beneficiary or trustee.
5. Retirement. During the retirement years, you may want to add provisions to your trust to make distributions to your grandchildren. You may want to provide for certain charities in your trust and you probably want to decide who should receive certain items of personal property such as jewelry, family heirlooms, or other items of personal property. If your estate is likely to be subject to estate taxes, you should consider reducing the size of your estate through gifting or creating an irrevocable life insurance trust or charitable trust.
Estate planning is not a one time project. Estate planning continues throughout your lifetime. As your life changes, your goals and objectives change which need to be incorporated into your estate plan. For all of life’s stages, call us at Law Office of Scott C. Soady, A Professional Corporation if we can help.