The estate planning process involves preparing how your assets are to be distributed or passed on after your death. It is a difficult topic to think about, but there are many important decisions to make.
Estate planning can involve drafting a will, creating trust funds and writing advanced directives. Many people wonder what age they need to be to start the process. The truth is, anyone who is a young adult or older could benefit! Estate planning’s benefits change throughout adulthood.
Benefits for young adults
When starting their careers, young adults may find a job that offers a 401(k) plan and life insurance coverage. They’ll need to name a beneficiary in case of a tragic turn of events. Long term partners whom they have not married yet are another consideration—if they want their significant partner to receive any of their assets in the case they pass away, they will need to establish a will.
Benefits for middle-aged adults
By ages 45-65, adults may have more substantial assets to worry about regarding where they will go should they die. This includes not only money, but also things such as houses and cars. They may also have children whose financial futures they are worried about.
It is at this time that making a clear will becomes especially important. s for their children may also be a consideration for them.
Benefits for retirees
In the sunset years, it is advantageous to think about how you can disperse your estate while incurring the least amount of taxes. This could be by starting to give gifts to friends and relatives, up to the yearly tax-free amount.
Medical directives and power of attorney are two important considerations for older people to make as well. Being able to choose how you are cared for and who will control your care after you are no longer able to make decisions can give you peace of mind.