Estate planning is often seen as something that only people in their later years need to consider, but the truth is that everyone, regardless of age or financial situation, can benefit from having an estate plan. Planning for the future ensures that your wishes are respected, your assets are protected, and your loved ones are taken care of, no matter what life throws your way. The key question is this: when should you start estate planning?
1. As Soon as You Have Dependents
One of the most important reasons to start estate planning early is if you have dependents—whether they’re children, elderly parents, or anyone who relies on you for care and support. A well-structured estate plan will make sure that they are taken care of in case you become incapacitated or pass away unexpectedly. This includes:
- Designating guardians for your children if they are minors.
- Setting up trusts to manage funds for their future education or well-being.
- Making arrangements for any other dependents who might need special care.
Having a plan in place can provide peace of mind, knowing that your loved ones will be in good hands even if you’re no longer there to care for them.
2. When You Start Accumulating Assets
Estate planning is also crucial as you begin to accumulate assets, whether it’s real estate, investments, or even personal property of significant value. By creating an estate plan, you ensure that these assets are distributed according to your wishes, and it can help reduce potential taxes and fees. Assets that may require planning include (but aren’t limited to):
- Real estate (homes, vacation properties, etc.)
- Retirement accounts
- Life insurance policies
- Bank accounts and savings
- Business ownership
If you’ve reached a point where you’ve accumulated significant assets, it’s time to think about how you want those assets to be distributed when the time comes.
3. After Major Life Events
Life events, both good and bad, often serve as great points for starting or revising your estate plan. For example, marriage, divorce, the birth of a child, or the death of a family member all represent significant changes in your life and family dynamics. These events may impact:
- Who you name as beneficiaries or powers of attorney.
- Who will be the guardian of your children.
- How you want to distribute your assets among family members.
Life changes provide the perfect opportunity to update or create an estate plan to ensure your wishes reflect your current situation.
4. As You Approach Milestones
Milestone ages or life stages, such as turning 18, purchasing a home, or reaching retirement age, also mark a good time to start or review your estate planning. At age 18, for example, you are considered a legal adult, and it’s the perfect time to make decisions about healthcare proxies and powers of attorney. Similarly, as you near retirement age, you may need to adjust your estate plan to focus more on preserving wealth for future generations or deciding how best to transfer your assets tax-efficiently.
5. If You Have Specific Wishes for End-of-Life Care
Estate planning isn’t just about who gets your things after you’re gone—it’s also about making decisions for your care if you’re unable to make those decisions for yourself. By creating advanced directives or living wills, you can specify your wishes for medical treatment, end-of-life care, and life support. This can relieve your family members from making difficult decisions on your behalf during an already emotional time.
6. When You Want to Minimize Family Conflict
One of the most common reasons families face conflict after a loved one passes is the lack of a clear estate plan. Without instructions on how assets should be divided, family members may fight over what’s left behind. By starting estate planning early, you can ensure your wishes are clear and reduce the potential for disagreements after your death. You can also reduce the stress your family will face in making decisions during a difficult time.
7. When You Want to Plan for Tax Efficiency
Estate taxes can take a big chunk out of your assets, especially if you have a significant estate. Planning ahead allows you to structure your assets in a way that minimizes estate taxes, leaving more for your heirs. Whether it’s through charitable giving, setting up trusts, or other tax strategies, working with an estate planner can help you make the most of your wealth while reducing the burden on your loved ones.
8. In Case of Unexpected Circumstances
Life is unpredictable, and none of us know what the future holds. Accidents, illnesses, and other unforeseen events can happen at any age. Estate planning ensures that your affairs are in order, no matter what comes your way. Having a will, healthcare directive, and powers of attorney in place will give you confidence that your wishes will be followed even if you’re no longer able to express them yourself.
Final Thoughts: The Best Time to Start Is Now
The best time to start estate planning is sooner than you might think. While it’s easy to delay, especially when life feels busy or uncertain, having a plan in place can offer peace of mind knowing that your affairs are in order. You don’t need to wait for a major life change or milestone—start today by making sure your family, assets, and wishes are protected for the future.
Estate planning is not just for the wealthy or elderly—it’s for anyone who wants to ensure that their loved ones are cared for and their wishes respected. Take the first step toward planning today, and you’ll be glad you did when the time comes.
Disclaimer: This post is a general overview of this topic and is not a substitute for a formal opinion from an attorney or tax accountant. This article is not sufficient guidance to avoid tax-related penalties. Should you need a formal opinion, Liljenquist Law is willing to provide such an opinion which would be the subject of a separate engagement letter.
