A lot of people in the San Francisco Bay Area and Southern California associate estate planning with older people. Partly because it deals with end-of-life decisions like inheritance, and partly because younger people tend to believe they have not accumulated enough wealth yet to worry about setting up a will or trust. Often, the attitude is, “I’ll wait until I’m older and more established to do estate planning.”
The fact is that estate planning has something to offer all adults, no matter their age, marital status, how many children they have, or their wealth. Here are some estate planning tools you should consider creating based on your current age.
If you are in your 20s, you are legally an adult, which means you alone have the right to make decisions about your medical care. Your parents cannot stand in for you if you are incapacitated. An advance healthcare directive gives you the power to specify the extent of medical intervention you would want in case you are unable to speak up. For example, if you are in a vegetative state someday, your advance healthcare directive would clarify if you want to be kept alive by artificial means.
The other part of protecting your preferences for emergency medical care. Designating a power of attorney lets someone you trust stand in for you when important decisions about your care must be made without your input. In California, there are medical powers of attorney and financial powers of attorney. You can select two people to handle each of these duties or have one person in charge of both.
At this point in your life, you probably have begun to establish your career. You likely have some money saved up and may have bought your first home. On the personal side, people in their 30s are more likely to be married or in a committed relationship, and they may have young children.
In other words, it’s time to set up a will, and maybe a trust also, as part of your estate plan. In your will, you designate who your heirs will be when you pass away, as well as who the executor of your estate will be. Meanwhile, you can use a trust to avoid taxes and distribute your assets to your loved ones more quickly. There are several types of trust available, depending on your goals and needs.
If you have reached 40 without drawing up a will, advance health care directive and power of attorney, now is the time to catch up. Meanwhile, at this point, your parents are probably in their 60s, 70s or 80s. If they have never talked to you about their estate plans, ask them to make sure they have one. Go over the details of their plans so that you know what to expect regarding their health care preferences, powers of attorney and executors of their estates.
Your 50s, 60s and beyond
Hopefully, you have a comprehensive estate plan in place by now. Like almost any legal document, you can make changes to your plan. If you created your plan years ago, there could be things in there that are no longer appropriate. For example, if you have gotten divorced, you may not want your ex to inherit part of your estate or be your power of attorney. Go over your estate plan with your attorney to identify things that need to be updated.