At what age do I need a will?
In a way, nobody “needs” a will. The State you live in will write a will for you if you don’t have one, with a law called “Intestate succession,” which simply means “without a will.” Basically things go to your next of kin. If you want everything to go to your parents, and you are single and have no children, then that may be all you need.
However, if you have people who depend on you for support and direction, then now will be the right age. Also, because you may be incapacitated at some point before you die, addressing who handles things then can be part of your estate planning. Estate planning is a crucial process for everyone, no matter what assets you have now.
If you want your family to be able to deal with your affairs, debts included, drafting an estate plan is critical, says Wealth Advisor’s recent article entitled “Estate planning for those 40 and under.”
If you have young children or other dependents, planning is vitally important. The less you have, the more important your plan is, so it can provide for as long as possible and in the best way for those most important to you. You can’t afford to make a mistake.
Talk to your family about various “what if” situations. It is important that you’ve discussed your wishes with your family and that you’ve considered the many contingencies that can happen, like a serious illness or injury, incapacity, or death. This also gives you the chance to explain your rationale for making a larger gift to one person, rather than an equal division among your heirs. This can be especially significant if there’s a second marriage with children from different relationships or a wide range of ages in beneficiaries. An open conversation can help to avoid hard feelings later.
If you determine you need a will, you should have the basic estate plan components, which include a will, a living will, an advance healthcare directive, powers of attorney, and a designation of the agent you choose to control disposing of your remains. These are all important components of an estate plan that should be created at the beginning of the planning process. A guardian should also be named for any minor children.
In addition, a life insurance policy can give your family the needed funds in the event of untimely death and loss of income—especially for young parents. The loss of one or both spouses’ income can have a drastic impact.
Remember that your estate plan shouldn’t be a “one and done thing.” You need to review your estate plan every few years. This gives you the opportunity to make changes based on significant life events, tax law changes, the addition of more children, or their changing needs. You should also monitor your insurance policies and investments because they dovetail into your estate plan and can fluctuate based on the economic environment.
When you draft these documents, you should work with a qualified estate planning attorney.
Reference: Wealth Advisor (Jan. 21, 2020) “Estate planning for those 40 and under”