Will and estate planning tasks aren’t at the forefront of every family’s mind. However, there does come a point when you need to establish at least the basic documents – if not for your own sake then for your family’s.

While not every person requires a comprehensive estate plan, 60% of Americans don’t even have a will.

Still not sure what estate planning is, exactly? Take a look back at our post introducing the concept before you read on!

Getting started with planning your family’s next steps doesn’t need to be complicated, particularly if your personal situation is not complex. Here’s what everyone should know about estate planning, whether you’re starting your first job or on the verge of retirement.

When Should You Start Will and Estate Planning?

It’s a common misconception that you should start estate planning around retirement age. After all, that’s the age when your wealth should be at its peak: you’ve been saving for years and you’re still receiving an income.

In reality, estate planning should begin in your 20s or 30s.

Even if you don’t have much in the way of assets yet, it’s important to start with the basics of estate planning that allow your loved ones to make decisions on your behalf in case of an emergency.

The practice is becoming particularly important for both Gen X’ers, millennials, and Gen Z. These groups are more likely to have a high volume of student loan debt, and so they’ll need to account for their debt in their plans.

Parents of these generations may need to consider student debt, too. The government offers helpful advice for older borrowers (usually co-signers).

Start with a Power of Attorney and an Advance Directive for Health Care

Once you’re over 18, no one else can make decisions about your finances or healthcare on your behalf. If you don’t have any kind of directive, it will be difficult for your loved ones to make decisions.

At the very least, you should have a durable power of attorney and an Advance Directive for Healthcare.

Make Sure Your Will Coordinates with Your Job Benefits

Once you have any type of retirement benefit or life insurance, you need to start thinking about beneficiaries. Someone needs to collect the benefit if you aren’t around to do so.

Your will allows you to name a beneficiary for any assets without a beneficiary designation and ensure that your money and property goes where you want it to. If you don’t have a will, the court determines who gets what assets, which complicates things for those who have partners but who are not legally married or in a registered partnership.  Your retirement accounts and life insurance have beneficiary designations that will control the distribution of those assets without having to go through court.  It’s important that your will and your beneficiary designations on your job benefits match up.

Get Ready for Kids

If you’re getting ready to have children or they’re already here, then you need to designate guardianship. This part of will and estate planning is often overlooked, but it is vital. If something happened and you did not designate guardianship, then the court chooses who your children live with. The judge may choose a member that you wouldn’t have chosen while alive.

In cases where the court can’t designate an appropriate person, your children could even become wards of the state. Though, this is a worst-case scenario.

Before creating the paperwork, it’s important to talk to the guardian you intend to nominate to ensure they’re comfortable with the decision. You may also find it’s a good idea to designate back-up guardians as a contingency plan.

You can include guardianship requests in your will if you prefer, or you can create it as a separate document.

Work on a Fuller Estate Plan as Your Finances Change

Around half of adults aged 18 to 34 aren’t saving for retirement at all and for many Americans, the issue of estate planning doesn’t become more complex until you reach a point where your assets begin to grow both in value and diversity.  That doesn’t mean you don’t need a plan, just that it will be simpler and more basic.

When you do begin to accumulate significant assets your plan will need to be updated to reflect your current circumstances.  You should begin planning by first organizing your financial information. You’ll need to know how much your assets are worth, what kind of debt you have, and what your net value is. This can include:

  • Homes and other types of real estate
  • Titled property (cars, boats, equipment, etc.)
  • Interest-bearing accounts
  • Investment accounts
  • Bank accounts
  • Life insurance
  • Items of value (art, antiques, collections, etc.)

You’ll need to carefully calculate the gross value of your estate and update it as required to ensure that everything is accounted for. Accuracy is everything: distribution and inheritance become more complicated when assets go unlisted.

Estimating the correct tax is also critical, and it relies on correctly tabulating your estate’s value. A will and estate planning expert can advise you on the potential tax liabilities of your total estate (both federal tax and in the state of Georgia).

It’s also important to realize that periodically updating your plan is important. As your life circumstances change, your plan should be amended to match so that when you die, your intentions with your estate will be satisfied.

Consider Special Circumstances

We don’t need to tell you that life is complicated. But, you do need to know how life’s twists and turns can impact your estate plan.

Some of the more common special circumstances include managing beneficiaries in blended families or planning for your adult children who have special needs.

In these cases, an estate plan is critical to the next steps. Parents of children who have a disability can also use specific trusts to help care for them after you’re gone.

These are all things to discuss with your estate planning advisor early in the process.

Does Your Family Have a Plan?

The most basic stages of will and estate planning should begin not when you start thinking about retirement but around the time you turn 18. Documents like power of attorney protect your parents or partner in the event of an emergency.

Otherwise, the estate planning process grows and changes as you do. That’s why it’s so important to work with an estate planner you know and trust, so they can ensure your life’s circumstances are reflected in your documents.

Are you ready to start planning? We can help you get started. Schedule a consultation online with Smith Barid today.