It is impossible to see into the future and know exactly what is coming. This is definitely true for when you may end up passing away. Although most people are hoping to live a long and healthy life, sometimes things do not turn out the way they hope. Therefore, you should always be ready for the unexpected, especially when it comes to family financial planning. This is why the best time to start planning your estate is as soon as possible.
Of course, the more assets you own the more you have at stake when planning your estate. Once you are of legal adult age, 18 years, you will usually start accumulating possessions. Here are some milestones which you should take as prompts to start looking at estate planning.
When starting a savings account as a young person, what you are saying is that you are ready to start building your estate, even if you are not necessarily thinking of it in that way. So, when you do start a savings account, it would be a good time to consider who you would want the funds in the account to go to in the case of you passing away.
Buying a home
Purchasing your first home is a significant financial decision since the home is generally the most common way people are able to pass on generational wealth to their heirs. Therefore, including your home in your will or trust is essential in order to help your intended beneficiaries avoid dealing with probate court.
Another important milestone in one’s life is marriage since this legally and financially ties you to another person. At this point you will want to decide what will happen to your combined assets in the event that one spouse dies unexpectedly.
The ending of a marriage is also a huge change in your finances since divorce will require you to divide assets with your spouse. This means the assets you own will change significantly. Therefore, it is a good idea to update your estate plan or start your estate plan if you have not done so already.
Birth of your child
Obviously, bringing a new child into the world is a big responsibility in many ways, including financially and legally. Since your child is completely dependent on you for everything, you will want to make sure that the child is taken care of in the case of you passing away suddenly. Therefore, make sure to address guardianship of your children in your estate planning documents. Also, you will want to make sure your child is able to benefit from the distribution of your assets.
Now is the time to start estate planning
As you can see, there really is not a time that is too early to start planning your estate. An effective estate plan will have certain essential legal documents. This will include a will or a trust, power of attorney documents, life insurance and more.
However, there are many ways you can design these legal documents which can be confusing if you do not have a broader wealth management strategy to follow. A wealth management adviser may be able to help you develop an estate planning strategy that works best for your particular situation.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.