If you are asking the question, “When is the right time to start estate planning?” The answer is likely right now.
Estate planning, unlike popular opinion, is not a one-and-done legal process. It requires creating a complete estate plan that covers all necessary aspects to ensure your wishes are fully addressed. Estate planning ensures that there are no surprises when it comes to your wishes and assets when you are gone, and the sooner you start the planning, the sooner you are protecting yourself for the future.
While it is best to start estate planning sooner rather than later, there are a lot of details that go into the process and need to be considered as you begin planning.
What Does Estate Planning Encompass?
At its core, estate planning is the development of a comprehensive plan for the management, protection, and distribution of your assets in case you become incapacitated or when you pass.
This means that you will be creating more than just a will; estate planning involves preparing several legal documents, such as powers of attorney, living wills, and trusts, to ensure your wishes are clearly outlined and legally recognized. However, to start at a will, a will gives you the ability to lay out your assets and name an executor. Beyond that, you can build trusts into your estate plan, ensuring that your assets are protected, probate is avoided, or the timing of distribution is legally binding.
Within an estate plan is also the ability to name a Power of Attorney. This is when you choose someone whom you trust to make financial or legal decisions in the event you become incapacitated. In addition to naming a Power of Attorney, if you have minor children in your life, you will want to name a guardian for them to ensure their care and management of their assets.
Another detail in estate planning is writing out your healthcare directive or living will, so you can clearly outline your wishes regarding medical care if you can’t speak for yourself. Living wills are essential legal documents that specify your healthcare preferences in advance. Overall, your estate plan is a full plan on what you want, what you don’t want, and what you hope to happen.
It is crucial to ensure that all legal documents in your estate plan are properly signed to make them valid and enforceable.
DIY vs Attorney-Assisted Estate Planning
If you go online and search “estate planning now,” you are going to find many sites providing DIY estate planning options that promise a quick and easy route. While they can be quick and easy, they are not always legally sound and completely protective of your wishes.
DIY options are likely to miss key details as they don’t ask the right questions and have general templates for everyone to fill out and utilize. Unfortunately, not everyone’s life is the same, and these templates are going to miss key details of your life. With these possible holes in your estate plan, you could be leaving yourself open to liabilities and questions.
On the other hand, when you partner with an estate planning attorney, the process can involve not only legal experts but also other professionals such as financial advisors and tax professionals, ensuring a comprehensive approach. These professionals have the experience and legal knowledge to approach your situation with a tailored plan in mind. They don’t rely on templates and can ensure that your specific lifestyle and needs are met in your estate plan. Estate planning attorneys and other involved professionals ensure that there are no holes in your estate plan.
How Early Can You Start Estate Planning?
Estate planning can begin as early as age 18. At 18, you become legally and financially responsible for your assets and choices. However, at 18, estate planning is far from the top of one’s mind.
For many, estate planning starts a few years later when large assets are acquired, such as a vehicle or home, or when families start to grow. At the latest, estate planning should start when you have a major change in life, such as a new home, getting married, having a child, or another significant moment in your life. When that happens, you should become responsible for what happens to that asset, including ensuring the proper transfer of assets to your heirs, and what it takes to protect it.
What to Include in Your Estate Plan
An estate plan includes all of your personal assets and information, and to ensure there is no confusion down the road, it is essential to include everything.
To start, look at your physical assets, such as property, land, vehicles, family heirlooms, and even businesses. You then want to assess your family to ensure that you are ready to protect any minor children and to include beneficiaries where necessary. You will also want to review all your accounts, including a retirement plan, Social Security, investments, a Roth IRA, life insurance policies, and debts. Be sure to update beneficiary designations on these accounts and policies to align with your overall estate plan, as this helps prevent conflicts and ensures assets go to your intended recipients.
An often missed area is digital assets. If you have digital investments, social media accounts, or media that you want planned for, you can include that in your estate plan. Additionally, consider other assets that may be held in trusts or other vehicles for asset protection and probate avoidance.
You will want to review everything you own that may need instruction or distribution after you are gone. This means looking at all aspects of finances, including income and potential income taxes that may arise from your estate, healthcare, and physical health. The settlement of your estate will also require addressing claims from creditors, resolving debts, and ensuring the final distribution of assets.
If you plan to make charitable donations, remember to include organizations as potential beneficiaries to maximize your charitable impact and potentially minimize estate taxes. When naming executors or guardians, ensure they are individuals you trust to act on your behalf in managing your estate and making decisions according to your wishes.
How Often Should You Review Your Estate Plan?
Life moves fast, and your estate plan should keep up. In a perfect world, an estate plan should be reviewed at least once a year, and also if any significant life changes occur.
To ensure your estate plan still matches your current assets and personal opinions, you should assess your estate plan on a yearly basis with your estate planning attorney. On top of that, if you get married, purchase a property, get divorced, have a child, there is a death in the family, or any other major life adjustment, such as divorce, you should go back to an estate planning attorney and ensure your estate plan continues to adjust with your life.
When making updates, especially those involving guardians or beneficiaries, be sure to obtain consent from all relevant parties, such as guardians, to respect their approval and ensure legal compliance. This will make sure that you are prepared at every point in your life.
Why You Should Partner With an Estate Planning Attorney
An estate plan is not one simple document that entails filling in the blanks. With wills, trusts, beneficiaries, healthcare directives, guardianships, and so much more to consider in an estate plan, all while ensuring it is legally sound within state and federal law, partnering with an estate planning attorney can ensure you are planning in the right direction.
An estate planning attorney will partner with you not only to create the plan but also to answer any and all questions or concerns you may have, providing essential support throughout the estate planning process. They can ensure you go through the process with confidence and don’t feel the need to rush or answer questions in ways that don’t feel like you. With an estate planning attorney, you have a partner through a journey that can be challenging to face. They become your guide, partner, and expert, ensuring you are legally and emotionally protected.
An estate plan is a long-term legal process. Partner with an estate planning attorney you can trust. Contact the team at Janssen Estate Probate & Elder Law.