Most people understand the idea that an estate plan is an important form of legal protection. They know if they die or have some personal emergency, the documents they create can be a crucial form of support. Despite the importance of an estate plan, quite a few people do not plan ahead of time for their death or a future emergency.
Recent research indicates that only about a third of adults in the United States have estate planning documents. The other two-thirds may claim they intend to create documents but have not yet taken any concrete steps to protect themselves or their family members in the event of a tragedy. Many people are simply waiting for the right opportunity to draft an estate plan.
What is the best time to create an estate plan?
After becoming an adult
18-year-olds who recently reached adulthood probably don’t have much property in their names. The average 18-year-old does not have a spouse or children to support either. What they do have are their own preferences regarding medical care and possibly their own financial responsibilities if they rent a living space.
New adults often benefit from estate planning because they can choose agents to handle their finances and medical matters if an emergency arises. After someone becomes an adult, their parents lose the authority to access their financial accounts or make medical choices on their behalf. Creating advance directives and powers of attorney are important moves for those who are legally adults.
After starting the family
Whether someone marries, has a baby or adopts their siblings due to a family emergency, the creation of a family is an important moment. Someone who has responsibilities to a partner or to dependent family members may need to plan for their protection if they die. They may also want to plan for the financial support of their loved ones if they die prematurely.
After reaching personal milestones
Maybe someone recently accepted their dream job with a very robust compensation package. Perhaps they just bought a home or started a small business. Those who have significant resources in their names often need an estate plan to protect them in the event of an emergency that could endanger their resources.
They may also want to leave clear instructions about who should inherit those resources if they die. Many people tell themselves that they need to wait until they achieve not one but instead all three of those goals before they begin estate planning. However, it is often much more beneficial to create an estate plan sooner. People can then update their estate plans regularly as their circumstances change.
The choice to create an estate plan early in life may offer the best protection to people in a variety of circumstances. Taking the time to draft documents sooner rather than later can give someone longer-term protection and peace of mind.
