Most people would agree with the statement that adults preparing for retirement should have an estate plan already in place, but beyond that, there is little consensus regarding when adults should create their estate plans.
Some people will say that estate planning becomes necessary when someone accumulates a certain amount of personal property. Others will use marital or parental relationships as the benchmark for estate planning. When is the appropriate time for people to create estate plans?
Every legal adult could use an estate plan
Many people feel surprised when they hear attorneys suggest that 18-year-olds and those heading off to college should have their own estate plans. After all, the typical 18-year-old new adult has very little property to their name and no one financially dependent on them.
However, estate plans aren’t just about handing out property and protecting dependent family members. Estate planning also protects the person drafting the document. One of the most important things you can do with an estate plan is to create advance directives and powers of attorney.
Anyone could require outside support for medical care and financial matters if they have a stroke or get into a car crash. Powers of attorney and advance medical directives give other people the authority to access medical records, make treatment decisions and even handle financial matters for someone medically incapacitated.
Those with possessions and responsibilities must adjust their plans
While an 18-year-old college student may not need a will because they don’t have property to allocate to others or children who need a guardian, adults in their 20s and 30s may have significant property, financial obligations like student loans and dependent family members to consider when they think about the future.
Those who have not already created an estate plan when they marry or have children will need to consider doing so as they grow their family. Those who take on significant debt for education or to start a business may want to plan to protect their loved ones. Individuals accumulating personal properties like real estate will also need to think about what happens to that property when they die.
Ideally, adults would start estate planning when they reach eighteen years of age and their parents can no longer manage their medical affairs and will then routinely update their estate plans over the decades as their life circumstances change. Recognizing when it is time to draft or update an estate plan can protect you and the people closest to you.