Estate Planning Priorities for Every Stage of Life

As nice as it would be, estate planning isn’t a task you can check off your list once and forget about forever. It’s meant to be an evolving process that grows and changes just as you do.

One thing does stay constant, though: Everyone should have the basic estate planning documents in place, no matter their age, income level, or family situation. Legally-recognized documents—including a will, power of attorney, and healthcare directive—should be considered non-negotiables for everyone.

That said, estate planning can be overwhelming, especially as your finances grow and get more complicated. So rather than trying to tackle everything at once, it may help to focus on key priorities that tend to matter most at certain stages of life. Just remember, your estate plan will require some ongoing reviews and updates, not just when you reach certain milestones.

Getting married

When the ceremony’s done and the honeymoon’s over, you and your partner should set time aside to update some important documents. It may not be particularly romantic or exciting, but establishing the right estate planning documents now can provide ongoing protection (and even some peace of mind) throughout your marriage.

Beneficiary designation

A beneficiary designation determines where certain accounts or payable-upon-death benefits will go in the event you die. It’s important to update this regularly, since a beneficiary designation outweighs what’s written in your will. For example, if your will says your spouse should receive your 401(k), but the beneficiary designation names your sibling, your sibling will be entitled to the funds.

Beneficiary designations are commonly found on:

• Life insurance policies
• Annuities
• Retirement accounts like 401(k)s and IRAs
• Brokerage accounts
• Checking and savings accounts
• Certificates of deposit (CDs)

Life insurance

This is also a good time to evaluate life insurance coverage, especially if one spouse is the primary earner for the family. If either of you already has a life insurance policy, confirm your spouse is listed correctly as the beneficiary.

Medical directive and power of attorney

If you’re ever in an accident or become incapacitated, a healthcare power of attorney will enable your spouse to make medical decisions for you without additional legal hurdles, delays, or complications. A medical directive can be used as well to outline your wishes regarding healthcare, treatment, and end-of-life decisions.

Remember, life-altering medical events can happen at any age. It’s better to be prepared with documents you’ll never need to use than wish you had them during a crisis.

Buying a new home

Whether it’s your first house or something better-suited for your growing family, a new home purchase is a major financial decision that warrants a check-in with your estate plan.

Titling and deeds

For most people, their home is the largest asset in their estate. As you get settled in, it may be worth double-checking that the property is titled correctly and included in your will, trust, or other estate documents.

While you’re at it, make sure all intended owners are correctly listed on the deed. The ownership structure could affect what happens to the home after the owner dies and how it’s passed on to the right inheritor.

Life insurance

Again, revisiting your life insurance policy could make sense after buying a home. If the primary earner dies unexpectedly, for example, insurance proceeds could help the surviving household members pay off the mortgage and avoid selling under financial pressure.

Household inventory

As you start filling up your home with sentimental heirlooms or other valuable items, keep tabs on what might need to be addressed in your will. You might find it helpful to take inventory of your property once a year or so and update your estate plan documents as needed to ensure all items are accounted for.

If valuables aren’t included in your documents, your family may be left hashing out ownership on their own or become bound by court rulings (even if these rulings don’t reflect your intentions).

Starting a family

Having children is one of the biggest milestones a family can experience, and it certainly warrants a check-in with your estate plan. Now more than ever, protecting your loved ones in the event of an untimely death is critical, as the number of people depending on you grows.

Legal guardianship

If nothing else, your will should be updated to name a legal guardian for your children. This person becomes a legally-recognized caretaker of your dependent children (under 18) in the event both you and the child’s other parent die. They’ll be in charge of caring for the child, housing them, and making day-to-day decisions for them.

Life insurance (specifically, a laddering strategy)

Some families choose to ladder term life insurance policies to help maximize coverage during certain time periods (say, for the first 20 years of a child’s life). To do this, they obtain several policies at the same time with varying lengths and values, locking in the lower rate now while tapering coverage as the child becomes older and less dependent.

For example, a term life insurance laddering strategy could look like:

• 10-year term: $200,000
• 15-year term: $200,000
• 20-year term: $100,000

In this case, a family has $500,000 in coverage for the first 10 years of a child’s life, before dropping to $300,000 for the next five years, and eventually $100,000.

Trust

Some families establish trusts for their children. A trust can be used to avoid probate, manage assets on a child’s behalf, and control when and how funds are distributed. Instead of a child receiving a full inheritance at age 18, for example, a trust can stagger distributions over time or tie them to specific purposes (such as paying for college tuition or a first home).

You will also need to name a trustee to oversee the trust in your absence, though this does not need to be the same person as your child’s legal guardian.

Caregiving for aging parents

If you care for older parents or loved ones, you’re likely already intertwined with aspects of their financial landscape and estate plan. But as you take care of the people you love, there are ways to fortify your own estate plan during this stage of life.

If you haven’t already, document your caregiving role clearly with information regarding daily routines, medications, providers, and preferences. Give copies to someone you trust, so they can easily step in quickly if needed.

Consider identifying a backup caregiver or decision-maker to take on the role if you become unavailable. You may need to include them on certain accounts or give them authorization to make decisions or withdrawals on your behalf. If you or your parents have a trust established for their care, for example, giving an additional caregiver access to the funds could help ensure your loved ones receive uninterrupted financial support and care.

Caregivers have an especially difficult challenge of minding a parent’s future well-being, in addition to worrying about themselves and their families. You may want to speak to an attorney or financial advisor to learn more about your options.

Health change

A serious diagnosis, whether sudden or expected, can send shockwaves through a family. But the more prepared you are to handle what’s ahead, the less added stress you and your loved ones will have to experience as you navigate a difficult journey together.

This is a good reminder that beyond transferring wealth after death, estate planning can be used to dictate your medical care in the event you become incapacitated.

Healthcare proxy or power of attorney

Should you lose cognitive ability or otherwise become unable to advocate for yourself, a healthcare proxy gives a trusted family member or friend the ability to make powerful decisions on your behalf.

Living will

A living will or advanced directive gives your family and doctors a direct roadmap of how you’d like your end-of-life journey to proceed. You can include important information about pain management, life support, resuscitation, and what to do if you become unable to communicate.

A living will takes the guesswork out of providing the care you desire when you’re unable to express your wishes on your own.

Long-term care

Should your health status decline, you may need the ongoing care provided through a nursing home, assisted living facility, or at-home aid. If you have time on your side, consider what type of long-term care you’d prefer—and what fits within your financial life.

You may be able to establish a separate savings account (even a tax-advantaged health savings account, if eligible) for future care needs, or consider a long-term care insurance policy.

Your estate plan should reflect you, at every stage

While you don’t need to wait for certain events (like marriage or homebuying) to establish an estate plan, these do serve as good checkpoints along life’s journey. Your estate plan needs to reflect your desires, priorities, and assets accurately, and that may mean reassessing your will, beneficiary designations, and other documents every few years.

If you’re ever unsure about what to include in your estate plan or where to start, consider speaking to an estate attorney and financial advisor. They can help you identify opportunities and build out a legally sound plan for you and your loved ones.