Planning what happens to your Estate when you are no more will depend on a number of things: your age, health, wealth and your instinct for caution. This article would involve broad categories focusing on family situations and age. Keep in mind though that age is affected by all sorts of factors and it is left for you to either add or subtract a few years based on your health and lifestyle.
In Your Twenties Or Thirties And Single
At your age, there’s not much point in putting a lot of energy into Estate Planning, or thirties, then you need to write a Will because bricks can fall on anyone.
Unless your lifestyle is unusually risky or you have a serious illness, you are unlikely to die anytime soon (all things being equal).
However, if you are amongst the uncommonly rich ones and still in your twenties This will ensure that you leave your possessions to the recipient of your choice – your boyfriend, favourite cousin, nephew who thinks you are cool, etc. If you fail to write a Will, whatever you leave behind will most probably go to your parents.
Engaged, But Not Yet Married
Just assuming you are engaged to be married to someone, then a Will is a must- have document. Without a Will, the State’s law will dictate where your property goes after your death and your closest relatives will inherit everything. If you are a live-in (unmarried partner) partner, you will get nothing.
Another option to ensure that your partner is not left out in the cold after your death is to own big-ticket items such as houses and cars jointly, with right of survivorship. When either of you dies, the survivor will automatically own 100% of the property.
You Have Young Children
If you have young children, then get yourself a Will. A Will allows you to leave your property to the specific person(s) you choose. In addition, a Will names a guardian to care for your children, ensuring the guardian takes over if you and the other parent are unavailable.
If you do not have a Will in place, some of your property may not even go to your spouse but directly to your children. If this happens, the surviving parent may not be able to spend or invest money without getting court permission, wasting money and time in the process.
In Your Forties
Most people consider Estate Planning at this stage of their life. Keep in mind though that your assets and what you want to do with them may change in the next 10 or 20 years. We advise that you be prepared to revisit and change your Estate Plan accordingly. First, start by creating a Will but consider some other planning options, notably setting up a Revocable Living Trust.
Now is the time to take concrete steps to establish an Estate Plan. First, the basics: consider a probate-avoidance Living Trust and, if you are concerned about minimising Estate Taxes, a tax-saving Trust. Write a Will or update an old one. Thereafter, take a minute to think about the possibility that at some point you might become unable to handle day-to-day financial matters or make healthcare decisions.
If you do not do anything to prepare for this unpleasant possibility, a Judge may have to appoint someone to make these decisions for you. No one wants a Court’s intervention in such personal matters, but someone must have legal authority to act on your behalf.
You can choose that person yourself and give him or her legal authority to act for you by creating durable Powers of Attorney. You will need one for your financial matters and another for health care. When choosing someone to act for you, spell out his or her authority.
You can even state that the document won’t have any effect unless and until you become incapacitated. Once signed and notarized, it is legally valid and your mind can be at ease.