Deciding to officially start the estate planning process is a wise move but one that doesn’t necessarily hinge on a specific date, age or life event. The answer to, “When should you start estate planning?” is “now”. Estate Planning is a process, and processes take time. Depending on your specific situation, family structure, the types of wealth you have accumulated, and who you want to inherit your assets after you pass, this process will take more or less time and require varying amounts of follow up and revisions over the course of your life. Everyone—regardless of age, health, or wealth—can benefit from having a solid estate plan in place. So, when should you start estate planning? Let’s break it down.
- Starting Early: The Best Approach
Ideally, estate planning should start sooner rather than later. Many people think they need to be wealthy or elderly to begin this process, but that’s a misconception. Here’s why it’s beneficial to start early:
- Clarity and control: By planning early, you ensure that your wishes are clearly documented. This includes decisions about how your assets will be distributed, who will take care of your minor children, and how your healthcare decisions will be made if you become incapacitated.
- Cost-effectiveness: Estate planning can be more straightforward and less costly if you start early. Procrastinating can lead to complex situations that might require more expensive solutions later on.
- Peace of mind: Having a plan in place provides peace of mind, knowing that your affairs will be handled according to your wishes, regardless of what the future holds.
- Life Events: Key Moments to Consider
Certain life events can be a good indicator that it’s time to start or update your estate plan:
- Marriage: When you get married, your estate plan should reflect your new spouse’s rights and responsibilities. This includes updating beneficiary designations and considering how your assets will be divided.
- Having children: The birth or adoption of a child is a significant life event that necessitates estate planning. You’ll need to name guardians for your children and decide how to manage and distribute assets to ensure their well-being.
- Buying a home: Acquiring real estate adds complexity to your estate. It’s important to decide how this property will be handled in your estate plan, whether it’s passed on to heirs or sold.
- Starting a business: If you own a business, your estate plan should address how the business will be managed or transferred upon your death or incapacitation.
- Retirement: As you approach retirement, reviewing and updating your estate plan becomes crucial to reflect changes in your financial situation and retirement goals.
- Health Changes: A Crucial Time for Review
Health changes—whether a serious diagnosis or simply aging—are critical times to review or begin estate planning:
- Serious illness: If you’re diagnosed with a serious illness, having an estate plan becomes even more important. It ensures that your healthcare wishes are known and that your assets are distributed according to your desires.
- Aging: As you get older, it’s wise to periodically review your estate plan to ensure it reflects your current situation and wishes.
- Legal and Financial Changes: Staying Up-to-Date
Changes in the law or your financial situation can also trigger the need for estate planning:
- Legal changes: Tax laws and estate planning laws change over time. Keeping up with these changes ensures that your plan remains effective and that you’re taking advantage of any new benefits or avoiding potential pitfalls. Your lawyer should proactively inform you of such considerations.
- Significant financial changes: If you experience a substantial increase or decrease in your wealth, your estate plan should be adjusted to reflect these changes. This includes updating wills, trusts, and beneficiary designations.
Estate planning is not a one-time task but an ongoing process that adapts to your life’s changes. Starting early, especially in the face of major life events or health changes, ensures that your wishes are honored, and your loved ones are cared for. By making estate planning a priority, you can navigate life’s uncertainties with confidence and provide peace of mind for yourself and those you care about.
To better understand the steps of the process and how a knowledgeable attorney can support you throughout life’s journey, contact Cherewka Law today.
