Estate planning is a process many people put off until very close to retirement. It is certainly smart for those about to end their professional pursuits and to start living on a fixed income to review their plans and make changes to them. However, waiting until you are in your fifties or sixties to think about your estate planning needs is a gamble.
You gamble with your health and the financial security of the people you love when you don’t plan ahead for what life may bring. When is the right time for people to create or review their estate plans?
When they first become adults
The typical 18-year-old isn’t even done with high school yet and may only have limited part-time work experience. They probably don’t have any property in their name or any direct dependents.
However, when they reach adulthood, they find themselves in a precarious position. While they may still have health insurance from their parents, their parents no longer have access to their medical records or the right to make decisions about their treatment in an emergency.
Those who turn 18, especially if they are about to start training for a career or packing for college, need advance medical directives and medical powers of attorney so that people they trust will have the authority to make medical choices for them and guidance about their preferences.
When they change their family situation
Moving out of home and starting your own household, even in a rented apartment, is a sign that it is time to plan your estate. You will have separate property and financial obligations that other family members won’t necessarily be able to handle on your behalf.
Another time when you need to create or adjust estate planning documents is when you decide to get married. Having children, getting divorced or losing a family member are all reasons to update or change the estate plan as well.
When there are major developments in your family life, your estate planning needs will likely change too.
When facing big changes in their careers or health
Are you about to start your own business? Changing how you hold property now could protect your home from business creditors in the future. Did the doctor just diagnose you with cancer? You may need to protect your assets from creditors and put a health care directive in place.
Knowing when to create an estate plan and the various times in your life when it would be smart to revisit those plans will protect you and the people you love from financial uncertainty and personal risk.