Preparing for what might happen in your lifetime gives you greater control and security.
An estate plan works like the operating system on your phone or computer. It runs in the background but needs occasional updates to keep the plan current. No matter what your income is, estate planning is an essential way of providing security for you and your loved ones, protecting your financial legacy and wishes, reducing taxes and preventing unnecessary legal and professional expenses.
Although nobody wakes up one day and decides it’s time to make an estate plan, different events at certain life stages can spark a reminder for you to do so. For example, if you think you may want to have children it may be even more valuable to be prepared for the unexpected. At the next stage of life, when you’re in your 40s and 50s, you may experience the challenges of the “sandwich generation” firsthand, caring for children and aging parents or loved ones. As you approach retirement, you want to make sure all your estate planning documents and beneficiaries are current.
To help keep your estate planning operating smoothly at three of life’s critical stages, here are some suggestions from two trust professionals.
Adding a family member
Having a will is a good place to start your estate planning. Although the internet offers a multitude of blank wills for you to fill out, having yours drawn up by an attorney is your best bet. They will provide options based upon your specific situation to allow you to make an informed decision. An estate planning attorney will also guide you through other estate planning documents such as powers of attorney and health care directive which are critical to an overall estate plan.
“At 27 years of age, a close friend of mine had a medical emergency and passed away leaving behind two young children,” says Rachelle Czaplinski, senior trust officer with BECU Trust Services. “Estate planning is not always top of mind at this age. If there had been a medical or health care power of attorney in place along with a will, that would have put her wishes in writing on who would make medical decisions on her behalf and who would care for her children.”
When you have a plan in place, she says, that takes a big weight off your shoulders, providing peace of mind knowing you have a safety net available for your wishes and your loved ones.
The above story makes a case for writing a will and assigning a medical power of attorney as early as age 18 when an individual becomes and adult. However, Neil Archibald, executive vice president and general counsel at Members Trust Company, a national trust and investment firm and affiliate of BECU, says perhaps more relevant than age is one’s situation. The birth of a child can be the first major trigger to develop an estate plan.
Midlife challenges and solutions
Many people in their 40s and 50s are raising their own children and taking care of their parents or loved ones; the phenomenon has been named the sandwich generation. Czaplinski knows about this generation personally. She’s living it.
Her aging parents live within five minutes of her family plus she and her husband are also raising an 8-year-old and an 11-year-old.
“My parents have the right documents, which includes power of attorney for both health care and finances, in place so I can talk to all of their doctors and step in medically and financially, if necessary,” she says. “Other documents to have in place include health care directives that allow your parents to decide about end-of-life care rather than loved ones burdened to make that decision.
She also cautions that parents, if they have a power of attorney, should inform all family members of what their plan is to ensure their wishes are carried out and to minimize family disputes.
Before and after retirement
Health issues tend to appear as retirement nears so having the right estate planning documents in place now is crucial.
Czaplinski says retirement is a good time to review your estate planning documents and make any changes you want, including your beneficiaries. The person previously named to carry out one’s wishes in the power of attorney documents or will may no longer be the best option. In addition, there may be grandchildren or other loved ones that need to be incorporated in your plan. It is important to work with your estate planning attorney when making any changes to your estate plan.
“It’s important to note that the term ‘estate plan’ at its heart simply means getting your affairs in order. That can mean joint ownership, beneficiary designations, to more complex vehicles like trusts. Whichever approach or combination you take, it should speak to your own situation,” Archibald says.
Adapting your estate plan throughout life’s expected stages and surprise detours helps ensure you’ll be in a good position to enjoy the payoff for all your hard work. You can focus your attention on the life you’re living.
Protect your financial legacy with personalized trust services You deserve thoughtful, personalized guidance when planning your estate. BECU Trust Services is committed to being your partner and helping ensure your wishes are upheld for the future.
Trust services provided by Members Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. Trust and Investment products are not federally insured, are not obligations of or guaranteed by the credit union or any affiliated entity, involve investment risks, including the possible loss of principal. This is for informational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or accountant.