Life Stages That Impact Your Estate Plan
Estate planning is vital at key life stages like college, marriage, and retirement. Regularly update your will, powers of attorney, and beneficiaries to match your evolving needs.
By Austin Payne
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Published 9.5.2024
More than half of Americans do not have any estate planning documents.** We surveyed hundreds of Americans and found that most people recognize the importance of estate planning but haven’t prioritized it. The reality is that everyone should have some level of estate planning documents. It should be a part of everyday life and financial planning. For instance, what would your loved ones need to handle if you were to pass away today? Are they prepared for a smooth transfer of your accounts, belongings, and other personal items? Do they know your wishes? Although our lives are unpredictable, here’s a breakdown of the life stages and situations where estate planning is crucial.
Before, During, or Immediately After College
College students often live away from home for the first time. They should have financial and healthcare powers of attorney in place. These documents ensure that parents or other trusted individuals can manage financial and healthcare issues if the student is unable to do so. Parents guiding their emerging adult child through estate planning is also a valuable life lesson.
Actions Suggested:
Create financial and health care powers of attorney (POA)
Update your will beneficiaries
Your First Real Job
As you settle into your new job, take steps to ensure your financial future is secure. This includes managing your savings and preparing for the future.
Actions Suggested:
Designate beneficiaries for your company’s retirement account (e.g., 401k)
Get your estate planning legal documents in order
Getting Married
Newly married couples often engage in estate planning to provide for each other. Without an estate plan, the default rules and regulations might not align with your wishes, potentially causing difficulties for your spouse. At a minimum, create a will and power of attorney to give your spouse the control you would want them to have if something unexpected happens.
Actions Suggested:
Create your will
Create financial and health care powers of attorney (POA)
Update your beneficiaries across all accounts
Having a Baby
Raising a child is a significant responsibility. Estate planning allows new parents to designate backup guardians and ensure that any inheritance is managed properly in a trust until the child reaches adulthood.
Actions Suggested:
Select a backup guardian
Create your will
Create financial and health care powers of attorney (POA)
Update your beneficiaries across all accounts
Adopting a Child
When adopting a child, it’s important to secure their future in case something happens to you. Creating a will and considering a living trust will designate legal guardians and ensure that the child is well taken care of.
Actions Suggested:
Select a backup guardian
Create your will
Consider creating a living trust
Create financial and health care powers of attorney (POA)
Update your beneficiaries across all accounts
Getting Divorced
A divorce is a major life change that necessitates updating your estate plan. Review and revise all estate planning documents, and update your beneficiaries to reflect your new circumstances.
Actions Suggested:
Review and update all of your estate planning documents
Create a new estate plan if needed
Update all of your beneficiaries across all accounts
Birth of a Grandchild
Many new grandparents want to include their grandchildren in their estate plan to help with college expenses or to give them a financial head start. Consider setting up a trust or specific distribution plan for your grandchildren.
Actions Suggested:
Create or update a specific distribution in trust for grandchildren
Update your beneficiaries across all accounts
Planning for Retirement
Congratulations on reaching retirement! Ensure your estate is protected for yourself and your loved ones. Designate the right family members to handle your financial and healthcare needs and control how your estate passes to your loved ones.
Actions Suggested:
Create or update your estate plan
Update your beneficiaries across all accounts
Inform and educate your advocates so they are ready to perform tasks on your behalf
To Sum It Up
Estate planning isn’t a one-time task. As you go through life, it’s essential to create, amend, and maintain your estate plan according to your changing circumstances. It’s easier than you think—get started today.