You mean different things by estate planning at different stages. You might think that you need to be older or have a bigger estate when you start planning your estate. But, that is counterproductive. No one knows how long they have to live, and it’s never too soon to organize your life. Create an estate plan that fits your life at that moment. You could be thirty or sixty, your needs may change but the need to plan remains constant.
Estate Planning In Your Twenties
There are a lucky few who have a fortune even in their early twenties. This could be because your parents have created a trust fund you inherited, or you are earning yourself. You might be in a cushy job or entrepreneurial attitude might be earning dividends. You might want to start planning for your future and retirement plans at this time.
Your late twenties could be the time when you are planning to marry. Kids follow suit. This is the time when you must start to plan your estate strategy. Life is uncertain even at this age. It is important that you have a healthcare directive and financial power of attorney in place. If you are already earning, it is wise to create a revocable trust.
Estate Planning In Your Thirties
This is the phase of life when you have a family, a home and financial assets too. It is a good time to review your estate plan. If you still do not have a plan in place, it is a good time to start strategizing. Time is your good friend. The earlier you start planning, the better the outcome. It is possible for you to chalk out a plan by yourself, but it is a good move to involve a professional. Your estate becomes tax efficient and can skip the legal fees of probate if you are careful.
The first step is to create a will. A Will is a document that specifies what you want to leave to whom. It can be modified with codicils at any point in time. You can use this way to allocate your assets to your loved ones. You can also establish guardianship for minor children through your will. Your will goes through probate which is lengthy and expensive.
You can effectively change ownership of your assets when you assign them to trusts. The trust becomes the owner and you can have specific instructions on healthcare directives and power of attorney in your trust. Your beneficiaries get their assets seamlessly without probate.
Trusts are of many types. You can create revocable trusts which are living trusts and create a two-tier system. The income from the trust can be distributed to one set of beneficiaries in their lifetime. The rest of the assets can be distributed to the next set once the first set of beneficiaries die.
Irrevocable trusts see the ownership of your assets change to the beneficiary’s name. These are helpful when you are sure who you want to leave your assets to. Irrevocable trusts are generally spousal trusts and domestic trusts.
Estate Planning In Your Forties
You should have the aforesaid measures in place by the time you are forty. But, if you have neglected to do so, it is not too late to start. Find the best estate planning lawyer in New York and get the process started. If you are blessed to still have your parents with you, it might be a good idea to understand what plans they have put in place.
You should have a fair idea about the long term plans and health care directives of your parents. It is imperative that you understand whether they need any monetary help from your side. In case they have made any trust or set aside an inheritance for you, you need to take stock. After all, the wellbeing of your parents is in your hands.
Estate Planning In The Later Years
You can still salvage your estate plan if you are still blissfully unaware. You need to move fast now. The fifties and onwards is a time to consolidate and review. You should make corrective changes and upgrade your plans as per your estate’s growth. Use the services of a seasoned professional who will help you fine tune your allocations. You should use the seventies age to ensure that your plan is updated.
Use your assets in the most tax efficient manner to leave behind a well-organized estate for your children. It also encourages them to do the same as they grow into adults.