Our own mortality is something no one wants to think about, so it’s quite normal that estate planning is one of those things that we tend to put off. But even though the thought of our own deaths is both terrifying and anxiety-inducing, it’s an incredibly important part of life.
Ensuring that our loved ones are taken care of after we’re gone is one of the best reasons to start thinking about estate planning. Not only can it help reduce the amount of taxes paid by your heirs, but it can also eliminate the dreaded family rivalries that have a tendency to crop up after a loved one’s death, as well as protecting your children and/or beneficiaries.
We all know that creating an estate plan is something we eventually have to do, but when is the best time to do it? Read on to find out when we think is the best time to start your estate planning.
Life Event Triggers To Start Your Estate Planning
The majority of financial advisors will likely tell you that you should start your estate planning the moment you turn 18, as you’re now a legal adult who is, most likely, freshly responsible for your own finances, healthcare (depending on where you live), and your power of attorney.
The reality is, though, that for many 18-year-olds, they can’t even fathom the idea of their own mortality, much less begin the process of creating an estate plan. So if you’re newly 18, or you’re a parent or guardian of someone who is, or, if you’re just wondering about estate planning yourself, here’s a list of life events that should trigger you to get that plan underway or updated.
Opening a savings account: The first time you open a savings account, you should start thinking about where you want that money to go, or who you want it to go to in the event of your death. Creating an estate plan can ensure that the people or charities that you wish to be the beneficiaries of your money will actually get it.
Buying a home: Have you recently purchased your first home, or will be planning to? Or maybe you’ve purchased additional real estate. Whatever the case may be, the purchase of your first home is definitely a trigger to get started with your estate planning, if you haven’t already. Additionally, your estate plan should be updated with every other real estate purchase you complete.
Getting married (or remarried): Have you and your spouse discussed what would happen in the event of one of your deaths? Or worse yet, both? Getting married and combining assets with your spouse is the perfect time to start these discussions so your family members and loved ones aren’t caught off guard in the event of a tragedy.
Getting divorced: Just as with getting married, if you’re recently divorced or planning on divorcing, now would be a good time to update your estate plan to reflect those life changes.
Birth of a child: Leaving a child behind in the event of your death is a parent’s worst nightmare, but it’s something we have to face in order to best protect our children. Not only do you need to create an estate plan after the birth of your child (and update it after any subsequent children), but it’s also imperative that you discuss the nomination of a guardian with your spouse if something were to happen to both of you.
Traveling abroad or for long trips: Do you tend to travel a lot? If so, you should start estate planning, or update your estate plan prior to any trips where you leave the country, or those that will be for long periods of time.
Receiving an inheritance: Coming into an inheritance can be a bit daunting for some people, especially when it kicks in all of a sudden, while you’re still dealing with the grief over the death of the person who left it to you. Grief can cause us to forget to do important things, so updating your estate to reflect any financial inheritances as they happen is a good rule of thumb to protect your assets.
Becoming a grandparent: It’s not just important to update your estate plan for the births of your own children, but if you plan to leave any of your assets – financial or otherwise – to any grandchildren or other newly born relatives, it’s a good idea to update your estate plan as they’re born.
If you’re reading this, it’s likely because you’ve been putting some thought into estate planning. That’s a good thing! We know that even though you know you should be doing it, it can still be kind of frightening. Even the thought of our own deaths can be stressful, let alone starting to plan for them. Let our kind, experienced professionals at Kalicki Collier take away that stress and help you get started on your estate planning. Call or visit our website to make an appointment today.