When does a person need an Estate Plan?

Everyone should create an estate plan on their 18th birthday, or very soon thereafter, if only for the disability documents. A simple Will is a good idea too. With the three essential documents, a Will, a Durable Power of Attorney for Property Management, and an Advance Health Care Directive, someone else can make sure that your wishes are carried out if you are unable to carry them out yourself.

There are, at a minimum, five times in a long life when an estate plan should be considered and examined. Other events can increase the number of times an estate plan should be examined: if a new marriage, a divorce or a death occurs; if a beneficiary or trustee dies; if there is a significant change in wealth or health status; or tax laws change that could have an application to your particular situation. The estate plan issues usually become more complicated with each stage. And of course, not all five stages will occur in everyone’s life, as death will end the need for an estate plan.

  1. At 18 years of age. Disability documents and a simple Will, so parents can care for a young adult child or for his or her affairs, if that child becomes incapacitated or dies.
  2. Typically during your 20’s or 30’s, when your first child is born and/or when you first purchase real property, usually your first home. The issues are guardianship of minor children and probate court protection.
  3. Somewhere around the age of 50, when your oldest child reaches the age of 18, or when all of your children have reached the age of 18. It is important to revisit your estate plan at this point because most parents are rightfully concerned about the possibility of their children inheriting significant property and/or responsibility at an age when they are probably not mature enough to be comfortable or knowledgeable about how to manage it. Also, children over 18 will need their own simple estate plans, or at least their parents will be glad they have one in the unlikely event that the need for one arises.
  4. When the settlor is in his or her 70’s, to examine the estate plan for its legal relevance to the settlor’s actual situation in terms of property holdings, the competency and condition of the beneficiaries and trustees, and the known physical and mental health care that is likely to be needed for the settlor’s own welfare.
  5. Again during the 90’s, if the settlor is still living, to make sure that all disability documents are up to date, and that the property is titled correctly for the settlor’s wishes for its distribution after the settlor’s disability or death, which by this point is realistically imminent.

Jan Cummins