When Do You Need Estate Planning?
How early is too early? I recently wrote another blog post going over the types of estate planning documents. When is the right time in life to think about having these done?
A good starting point to know when you should start considering talking to an estate planning attorney is when you acquire assets that do not have a beneficiary or are not payable on death (POD)- or maybe you’ve chosen to leave those blank for some reason. Any assets that pass by POD or have a beneficiary listed are considered non-probate assets and do not require probate to gain access to these after death. However, once you have assets that are probate assets, such as real estate, vehicles, business interests, your estate may require probate in the future, so it’s best to plan.
Another point in life to consider having your documents prepared is when you have children, especially minor children. In a will, a guardian for a child can be appointed to take care of them in the event the parents have predeceased the child. In addition to the appointment of a guardian, the terms of the child’s inheritance can be established. Within the will, a trust can be created for your child to manage their inheritance until a certain age. A trusted individual is chosen as trustee of the trust and follows the terms of the trust which may include when the child receives a portion of their inheritance and what it should be used for (school, health, etc.). One of the reasons for this is that it might not be the best idea to hand an 18 year old their full inheritance to do whatever they want with it. By establishing the trust, it helps them manage their inheritance over a longer period of time.
Notice that the above two points in life do not mention age or wealth. Neither age nor wealth are great indicators of when you should start estate planning in your life. I’ve previously talked about how estate planning usually gets put on the back burner because it’s a common thought to wait until you’re older or wait until you’ve accumulated more wealth. However, those things are not guaranteed in life. Wills can be changed- and should be changed as your life changes. Life is short and it’s best to be prepared not only for yourself but for your family as well.
The information contained in this post is provided for informational purposes only, and should not be construed as offering legal advice, or creating an attorney client relationship.
