There are certain life events that seem to signal to the world that you are an adult. Having a baby, purchasing your first home, or buying life insurance can feel like huge undertakings or mature choices you aren’t yet ready to make. No other financial preparation choice can seem like a more mature decision than creating an estate plan. So, how do you know if you are ready to work with an attorney to create an estate plan? There are changes in your life that can signal it’s time to put your financial house in order, and there is no better way to do so than with a lasting legal document like a will, trust, or advance healthcare directive.
What is an Estate Plan?
More than a will, an estate plan is a collection of legal documents that, when compiled, can provide guidance and agency to heirs during the distribution of assets after death. Estate plans are important legal instruments, but often, families and individuals are too uncomfortable to take this important financial planning step and end up missing out on many of the benefits that can come from making advance death preparations. It’s understandable that most people feel strange focusing on their death, but it can help your loved ones know your exact wishes once you pass away.
Five Signs it’s Time to Draft an Estate Plan
If you are wondering when you should start drafting an Estate Plan, the quick answer would be as soon as you’re a legal adult. It may seem wild to have a death plan when you’re 18 years old, but if you have possessions in your name or specific wishes about what it means to die with dignity, then you should create documentation to let your loved ones know.
The following milestone events and lifestyle changes would warrant making changes to an early life estate plan or drafting an initial one:
- Savings Account: A savings account is an asset. Before you pass away, you will want to have designated where those funds should go. A will can take care of this for you.
- Real Estate Purchase: Whether you are purchasing your first home or rental property as an investment, you will need to put a will or detailed estate plan in place to avoid your property being handled in a manner adverse to your wishes.
- Marriage: When you marry, you combine your assets and resources, so if you or your spouse dies, you want to clearly outline what will happen to your assets. You and your spouse have different families of origin, and there are a few potential heirs to your property. It’s worth the effort to take the time to clarify how you’d both like assets distributed if one or both parties die.
- Expanding Your Family: Whether you give birth to a child or adopt, you will need to plan for what happens to any minor children should you and your spouse pass away. Issues of guardianship and financial support would need to be outlined and the responsible parties informed of your wishes.
- Divorce: If you and your divorced spouse created an estate plan together, you would need to update it to reflect changes to your financial plans post-divorce.
Your initial estate plan won’t be very long and extensive if you don’t have assets, and once you’ve completed it, you won’t have to worry about it again until you’ve experienced a milestone event or significant change to your income.
Palmer Rodak & Associates can help you develop an estate plan that clearly states your wishes. Don’t wait until it’s too late to prepare. Call us today at (760) 573-2223 to schedule a consultation.