Not To Be Morbid, But When Should Estate Planning Begin? Probably Earlier Than You Think

Estate planning isn't just for the elderly or the ultra-wealthy. Everyone needs a plan for what happens to their things when they die so that they can have a say in who gets what. In addition to getting your budget in check, saving for retirement, and following the 50/30/20 budgeting rule, it's a good idea to have a plan in place by your thirties that includes what happens to your things when you die and how they'll be distributed. You may also want to consider a trust, which includes financial plans for how your wealth and property may be managed after your death or incapacitation. Consider too a power of attorney, someone you legally designate to make decisions for you. Estate planning should also include a medical directive and a living will that includes your wishes if you're unable to give consent to medical care.

Estate planning is even more important if you have children, to stipulate who will care for them in the event of your death or incapacitation. Name a guardian for them to ensure that they're taken care of immediately. "Having even a temporary plan online is critical to protecting your family by the time you're 35," certified financial planner Alison Norris told Refinery29. But even if you don't have children, it's a wise plan to have something in place. It's entirely likely that it'll change and evolve throughout your life, but having something set in the meantime makes good sense.

Take an inventory of what you have and write a will

The first thing to do when planning your estate is to take an inventory of what you own. This includes your home and other real estate, your checking and savings accounts, your car, personal items, and life insurance policies. It doesn't have to be a grandiose array of things. It's simply a thorough accounting of your assets. It would also be helpful here to note your liabilities, including mortgages, credit card debts, and other debts. 

The next thing to do is assess what your family and loved ones need. Consider who needs what and allocate accordingly, and if you have children, name their guardians. This is the stage where you write a will, a legal document that contains your explicit wishes for what happens to your property and assets when you die. It can depend on the laws of where you live, but in many states and countries, a will is considered valid if you write it yourself, sign the document, and date it with two witnesses present, according to The Lauterbach Law Firm. However, you may wish to involve an attorney. If you don't have any plan in place, the court can take over your estate and decide things for you. This can be particularly difficult for your family. They may be forced to waste considerable time and money trying to gain access to inheritances and guardianships.

The importance of a medical directive and a living will

Another facet of estate planning is making a living will and providing medical directive. According to the Mayo Clinic, a living will is a legal document with your medical wishes should you become incapacitated. It includes what measures you want taken to keep you alive, and it includes your wishes in regard to organ donation. Another important part of this is palliative care, which deals with your comfort and pain management. Lastly, you can also include in this list whether or not you want to donate your body.

In this living will, you will also want to name your health care proxy, or the person you have chosen to carry out these wishes. Often, people choose a spouse or family member and discuss these wishes ahead of time, so that the individual is able to act in alignment with your wishes. This discussion, and the living will, should also include end-of-life decisions, and what you'd want to have happen in regard to ending treatments.

As your life changes, you may want to revise both your will and your living will, but once you have something in place now, you can rest assured that there's security for the moment. If things need to be changed or altered, you can do so when and if the need arises, whether your family grows, your finances change, or your health changes.