When do I need an estate planning attorney? There is no “right” time to take care of your estate planning. Every adult can benefit from typical estate documents—a Will, durable Power of Attorney for finances and Health Care Power of Attorney for medical decisions—as they are fluid and can evolve and grow with you as your circumstances in life change. Check out these key life moments in which an estate planning attorney can help you achieve peace of mind as you unlock key life milestones.
Marriage
When you get married, you will likely want to put estate planning documents in place to ensure that your assets are transferred to your new spouse upon your death. Consider this complementary to a prenup agreement.
It is often assumed that one’s spouse would receive all assets upon death; however, state intestacy laws may dictate otherwise. For example, in Pennsylvania, if you are married and die without a Will but have living parents and/or children, they actually inherit a portion of your estate. Let’s illustrate this scenario with an example: Alex and Brad married five years ago. Since then, they have had two children, Carly and Dylan. Brad died unexpectedly, before finalizing his estate plan. As a result of dying intestate, Alex inherits the first $30,000 of Brad’s estate, and one-half of the remaining intestate estate. It should be noted that the “intestate estate” does not include beneficiared assets, as those will pass according to their designations.
Beyond just your Will, you may want to ensure that your spouse is specified in the following documents:
- as your Agent for Power of Attorney documents to make decisions about your finances and/or property
- as your Agent for a Living Will/Health Care Power of Attorney to make medical decisions should you become incapacitated; alternatively, you may want to select someone else to fill this role if you’re unsure your spouse can handle that responsibility/potential emotional overwhelm
- as Executor of your estate under your Will; again, if you feel they are the best fit for this role
- as beneficiary on retirement plans and accounts like a 401k, life insurance, pension, IRA, etc.
Being newlyweds is an exciting time, but don’t let the glow of your love be overshadowed by an untimely passing and posthumous headache for your spouse.
Birth of first child
Whoa, baby! Upon the birth of your first child (and any subsequent children), you may wish to change contingent beneficiaries under your Will if your spouse (or partner) is not available to receive assets. If your assets do not pass to your spouse, they could pass equally to your child or future children instead.
You should also update (or create) your Will to name a guardian for your child or children while they are minors, in case both you and your spouse pass before your children are adults. In absence of naming a guardian, the court will likely grant guardianship to your parents, siblings, or in-laws. Not content with these choices? Be sure to document your wishes or perhaps a “people to avoid” list in your Will.
Single or divorced parents should also consider documenting their wishes as to custody and distribution of assets. Single parents may have to take additional steps to prove they are a child’s parents and/or obtain custody rights.
Some parents also set up a Trust to provide funds stewarded by a Trustee for minor and/or special needs children. Speak to your estate attorney to see if a Trust is right for you.
Children become adults
When your children reach adulthood, many big changes take place! One of these changes may be to your estate planning documents, where you name your children as successor Executors under your Will or Agents in Power of Attorney documents after your spouse.
You can also update your Will to remove guardianship provisions and consider making updates to any Trusts. Have a special needs child who is turning 18 soon? You’ll need to navigate the guardianship process and petition the court to continue making medical, financial, and personal decisions.
It’s also wise to have discussions with your adult children about creating their own estate plans and giving them a voice over their futures.
Accumulation of assets
At any point during your life, you may accumulate various assets. If you purchase real estate or come into significant wealth, you may want to update your estate planning documents accordingly. A major increase in wealth may necessitate new estate planning documents with more complex tax planning.
High-wealth individuals often have an abundance of assets – real estate properties, businesses, and investment funds – that are complex to manage. Trusts, typically Revocable Trusts, offer distinct advantages in terms of management and minimizing involvement of local courts.
Retirement estate planning
As you near retirement, there are several ways you can update your estate documents to reflect this next phase of life. Often in conjunction with a financial advisor and estate attorney, you are combining managing assets for income during your lifetime with structuring their transfer to beneficiaries to minimize taxes and avoid probate upon your death.
At this phase, you may also have welcomed grandchildren and will want to consider setting aside an inheritance for them. Have a vacation home? You may face a decision: gifting during your lifetime or upon death. An attorney can advise on utilizing Trusts or even setting up an Limited Liability Companies (LLC) to avoid probate, reduce taxes, and manage ownership disputes among beneficiaries.
Perhaps you only ever had a Will and saw no need to establish a financial Power of Attorney or Living Will. Now is the time to authorize trusted individuals to make decisions if you become incapacitated, while you still have your health and faculties. Live life to the fullest when you know your wishes are being honored.
Estate planning support for all of life’s changes
Even beyond these milestones, there are life circumstances which may prompt estate planning updates:
- Death of a spouse, child, Agent or other beneficiary
- Divorce, yours or adult children (impact beneficiaries)
- Moving to a new state or out-of-state real estate purchases
- Remarriage/blending of families
- Changes in health, i.e. diagnosis of a serious illness
Outside of these happenings, it’s generally recommended to review your estate plan every five to ten years to ensure it remains up to date. “Set it and forget it” is not a wise strategy! Life gets busy and making the time to sit down and create an estate plan can feel overwhelming. Working with an experienced estate planning attorney can help ease this burden and ensure that no matter what pops up on your timeline, you can live confidently knowing you’ve protected who and what matters most.
