Have you thought about what will happen to your assets and possessions after you die? It is an important question to ask at various points in life, even if it isn’t much fun to think about. Making sure your end-of-life wishes are followed, and your loved ones are taken care of after your death requires an Estate Plan.
At what point should Estate Planning be considered? When certain life milestones are reached, you can identify the right time to handle each of your estate planning needs, such as:
- Nomination of a Guardian
- Making a Will
- Establishing a Trust
- Updating Your Estate Plan
When Is An Estate Plan Necessary?
Many financial advisors recommend that you make an Estate Plan as soon as you become an adult and update it every three to five years after that. The reason for this is that, as an 18-year-old, you are now held responsible for your healthcare, finances, and power of attorney; and you want to ensure that everything is in order. Most young people do not think about estate planning at all, which is entirely normal.
It is important to remember that there are a few common life events that one should never overlook when deciding how to prioritize an estate plan. No matter how old you are, the following life events should prompt you to start (or update) your Estate Plan:
- Savings Account – Once you begin to build a savings account, your next step is, naturally, to designate where those funds will be distributed when you pass away. Your account can then be transferred to a loved one or the cause of your choice.
- Home & Additional Property Ownership – Buying a home or another property is a sign to begin estate planning since you probably want to avoid lengthy probate proceedings.
- Marriage & Remarriage – When assets combine with one another, estate planning is essential. Consider what will happen if either spouse dies, as well as both.
- Travel – It is recommended that you update your estate plan before big trips, at the very least, especially if you travel for long periods of time or frequently leave the country.
- First child, and each one after – The birth of a child is one of the most apparent estate planning triggers. In case of an emergency, you need to consider guardianship and financial security.
- Inheritance of money or other assets – It is possible for an inheritance to kick in suddenly, allowing people who are experiencing difficulty to take care of more assets. Any additional money or assets you inherit should be added to your estate planning documents.
- Divorce – It is essential to update any old estate plans you and your former spouse made whenever a divorce occurs.
- Grandchildren or births in the family – As your family grows, you should update your Will or any trusts to ensure they are adequately protected.
Choosing A Guardian
It is always a good idea to start thinking about whom you would choose as a guardian for your first child as soon as you get pregnant. It isn’t a thought most first-time parents want to dwell on, but it is essential to put it in writing. Typically, guardians are named when you create a Will, but there are other options available to those who are not yet prepared for this process. Each time you have a child, these documents will need to be updated.
When To Make A Will
You should make a Will as soon as you become a legal adult or reach any of the above estate planning milestones. Sadly, many Americans die without a valid Will. The result is that family members are coping with loss while also being responsible for many decisions they may not have considered. Having a Will will prevent this situation, as you can designate a power of attorney, appoint a healthcare proxy, and specify how your assets and money will be distributed after your death.
During the estate planning process, Montgomery & Hart assists you in creating a customized will based on your personal needs. In addition to having a Will, it may be time to think about creating a Trust.
When To Create A Trust
You may want to establish your Trust if you have more assets, such as property or investments. With Trusts, you have more control over how your assets will be distributed while you’re living and after your death, and you can avoid probate. Furthermore, creating a trust can help you avoid additional taxes or fees as your assets pass to beneficiaries. A Montgomery & Hart estate attorney can take you through the different kinds of trusts available so that you can create a comprehensive Estate Plan.
When To Update Your Estate Plan
“Triggers” in estate planning are essentially any events that increase your wealth or affect how your assets are distributed after you die. Make sure that your Estate Plan is updated each time you approach one of these life events. After all, life can change quickly, and it is crucial to plan for that in advance. We recommend reviewing and updating your estate plan every three to five years.
Do You Still Have Questions About Estate Planning?
To protect your family and your future, one of the most important things you can do is plan your estate. By creating a Will or even appointing a Guardian for your children, you can ensure that your wishes are followed after your death. As you approach one of the milestones above, it is a good idea to start thinking about your options. If you have a question about when to create an Estate Plan we didn’t answer, contact us today by calling (980) 243-4470 or contact one of our estate planning lawyers today.