Part 3 of a 4-part series

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Simply put, EVERYONE over the age of 18 needs some sort of an estate plan, which will grow and change over time. Let’s look at the purpose of a complete estate plan for different life stages. Of course, people pass through different life stages at all different ages. These age ranges are generalities.

 

AGES 18 to 25: In this age group, people are graduating from high school, going off to college, leaving home for the first time, and obtaining their first “grown-up” job. At the very least, people in this age group should have a Power of Attorney and some health care documents, with their parents or another trusted relative as Agent.  People this age may think they “know it all” until they have a problem with a bank or they become ill or injured, and suddenly need their parents to intercede. Schools and medical providers may not release any information to anyone without these documents or some sort of release, including your parents, because of FERPA and HIPAA laws.

 

AGES 20 to 40: At this point people’s careers are beginning to take off. They are earning more money, which they may invest, and they are purchasing larger assets, such as homes and cars. This is also the time many people get married or partnered, and begin having children. At this point, you will want to consider changing your agents or executor to a spouse or partner, or an adult sibling. All bank accounts and investments should either be held jointly, or should name a Payable on Death beneficiary. Real estate should be held in Survivorship or have a Transfer on Death beneficiary, or both.

 

AGES 35 to 55: People are now well-settled in their careers, and their children are beginning to come of age. This is also an age group where divorce is common, as well as remarriage and blended families. The laws regarding who is entitled to what in the event of divorce, remarriage, and step-children can be complex. Generally a divorced spouse is entitled to no part of your estate, but if that spouse is named specifically as a beneficiary or an agent, you should take steps to revise your documents to remove them. There is usually some wealth accumulation, and in the event of a career change that may involve a reduced income, these assets need to be protected for you to live on. This is where a good Financial Planner and/or CPA can be useful. Your attorney can work with these other professionals to help determine how best to meet your needs. Now that your children are legally adults, they can serve as your agent or executor, if you feel they are up to the responsibility. At the least, they can be named as alternates after your spouse.

 

AGES 50 to 65: This is the time when children are officially “grown up,” moving out of their parents’ home and settling down with their own partners and having their own children. You may also be slowing down in your career and beginning to think about retirement. Sometimes new health issues crop up. You may downsize your home. At this point, you can name your children as your agents or executors, if your spouse has predeceased you or you feel he/she is no longer able to handle the job. You also need to think about what happens if one of your children predeceases you, leaving children of their own. Finally, if one spouse dies, all of the assets need to be retitled to the surviving spouse. If you do purchase a new home, it is important to remember to execute a new Survivorship Deed and/or Transfer on Death Designation Affidavit.

 

AGES 65 and up: Many people work well into their 70s or beyond, but this is typically when people begin to retire. Their children are grown and gone, living their own lives with their own families. Maybe they have left the state. Illnesses are common, as well as diminished capacity. Your family may believe it’s in your best interest to move to independent or assisted living. Or maybe you just don’t need that big house anymore, so it’s time to sell and move to a nice apartment or condo without maintenance responsibilities. It is also possible that your beneficiaries or agents are beginning to predecease you. It is especially important to review documents at this time to remove the names of people who have passed away, or whose circumstances have changed such that they are no longer suitable to assist you. Finally, if incompetence is an issue, it is vital to have already executed powers of attorney and health care documents, since a person who is not legally competent cannot execute documents of any kind. Your power of attorney names a guardian for you in this event, so that if the court need to get involved, your wishes about who takes care of you are already known.

 

NEXT: I’m still not convinced. What’s the big deal if I do no planning at all?

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