Most people consider themselves too young to start estate planning. It’s something their parents should think about, or their grandparents need to do. The truth is that there are advantages to estate planning at different ages — and significant drawbacks to putting off the task for another day.
Every generation has different priorities and circumstances, but they all have one thing in common: Young or old, your property will be distributed according to state law if you were to pass away tomorrow. Whether you’re just starting out or headed for retirement, starting an estate plan can prevent dire consequences for your family and property. As an experienced estate planning attorney, I want to share some practical steps for estate planning for any generation and at each decade of life.
What Age Should You Do Estate Planning?
There’s no “right age” to start estate planning. It ultimately depends on the amount of assets a person has, their health, their marital status, their business holdings, and other personal factors. That said, it can never be too early to make a plan, but it can be too late.
Whether you’re just starting out or enjoying your golden years, it’s about setting up a roadmap for your money, belongings, and wisdom. If you’re young, think of it as a way to make sure your pet gets pampered if something unexpected happens. Middle-aged? It’s your chance to make retirement dreams a reality. And for the seasoned, it’s about enjoying your golden years worry-free.
Estate Planning Priorities by Generation
Baby Boomers (Born 1946–1965)
Baby boomers, born from 1946 to 1965, are reaping the benefits of economic growth and a lifetime of hard work. They enjoy stable pensions and retirement benefits thanks to the post-World War II economic boom. Many baby boomers hold accumulated wealth in real estate and investments. In fact, the expected transfer value of the Baby Boomer generation’s wealth is expected to be greater than $50,000,000,000 (yes, that’s 50 trillion dollars).
The boomer generation’s longer life expectancy is an opportunity for extended leisure and family time. However, older adults need careful planning to get the most out of retirement and leave a meaningful legacy for their heirs.
Generation X (Born 1965–1980)
Generation X, born in the late 1960s to early 1980s, weathered a digital revolution their parents never dreamed of. Gen Xers saw the rise of personal computing in their college years and benefited from a strong job market. The original latchkey kids, Gen Xers pioneered the idea of work-life balance, prioritizing family and individual fulfillment.
Today, they face the twin challenges of raising a family and caring for their aging parents. While Gen Xers originally thought about what they might do with their parents’ Rolling Stones vinyls and if the CD jewel cases with their album art might be worth something, the reality now is how to ensure their heirs get access to their digital playlists.
Millennials (Born 1981–1996)
Millennials, born between 1981 and 1996, had the benefit of screen-free childhoods before becoming technology-rich young adults. Millennials often embrace innovation and integrate technology into daily life. This generation makes up a significant portion of the U.S. workforce as employees, remote workers, gig workers, and entrepreneurs.
Despite several economic recessions, millennials are starting to reap the rewards of their hard work. Key estate planning considerations include designating guardians for minor children, paying off debts, and building a secure financial future.
Generation Z (Born 1997–2012)
Gen Z, or Zoomers, were born into the tech-centric world of the mid-1990s to early 2010s. Gen Z uses online platforms for everything—work, social connections, personal expression, and necessities of daily life. They thrive on change, using their constant access to information to promote diversity, inclusivity, and global issues.
They might be young, but Gen Z’s tech-savvy shows the importance of estate planning at different ages. For example, their parents lose the right to make medical decisions for them once they reach the age of majority. They’re also more likely to accumulate wealth from a young age and have more assets than their parents did as young adults. What legacy will Gen Z have if they become “disconnected”?
Estate Planning Tips for Every Decade of Life
Your estate plan naturally evolves as you progress through the various stages of your life. Every so often, your priorities, assets, and family dynamics change, requiring thoughtful adjustments to your estate planning at different ages.
Here are a few general tips for building and revising an estate plan throughout different decades:
Teens: Coming of Age
On a person’s 18th birthday, they become an adult in the eyes of the law. This affords a great deal of freedom, but it also revokes a parent’s authority to make life-or-death decisions on their behalf.
Healthcare designations, living wills, and powers of attorney are essential estate planning tools for kids turning 18. Teenagers should complete these documents before they head off to college, travel the world, or start their post-high school jobs. This way, their parents can legally care for them if something goes wrong.
20s: Laying the Foundation
Estate planning may not be a top priority in early adulthood, but it’s essential to lay a strong foundation. At this age, individuals typically start accumulating assets, such as savings, income, and investments. Make sure you have designated a beneficiary on your bank account, 401k, stocks, or any other account in your name. Indeed, if a twentysomething bucks the conventional wisdom of spend it before you earn it, they have the potential to be financially secure (passively) long before retirement.
While the focus may be on establishing a career and financial independence, creating a basic will is crucial. This document outlines how assets should be distributed in the event of untimely death and designates someone to act as your executor.
30s: Navigating Family Expansion
As individuals enter their 30s, they often experience significant life changes, such as getting married, having children, and buying their first home. This is a pivotal time to revisit the estate plan. Naming guardians for children in the event of both parents’ deaths is crucial. In addition, be sure to update the beneficiary on your retirement accounts and life insurance policy so these assets align with the family structure.
40s: Juggling Responsibilities
The 40s bring a balancing act of increased financial responsibilities, providing for young children, and looking after retired parents. Estate planning takes on added complexity as individuals accumulate more substantial assets, enter into business contracts, or marry for the second time.
Now might be the time to consider managing assets with a trust. Trusts cover a variety of assets, including real estate and investment accounts, providing a flexible and comprehensive tool for effective estate planning. Trusts also avoid probate, ensuring the efficient transfer of your assets and minimizing tax implications.
Take care when choosing the trustee who will oversee and manage your assets on behalf of the designated beneficiaries. You should also ask for an attorney’s help to make sure assets are properly titled in the name of the trust. Any property left outside certain types of trusts can be subject to debt collection and lawsuit judgments—including divorce settlements.
50s: Preparing for Retirement
As they approach retirement, individuals in their 50s often focus on preserving their wealth to prepare for a life outside the workforce. Considerations include transferring additional properties into revocable living trusts to avoid probate delays and reassessing beneficiary designations.
Power of attorney documents become more pressing, designating a trusted relative to make financial and healthcare decisions if you’re suddenly incapacitated. If you haven’t created these already, do so. If you have them on file, make sure they’re accurate.
Finally, you might consider using this opportunity to speak to your parents about their estate plans. Working on your plans at the same time reinforces the idea that this is something everyone must do, helping to avoid embarrassment and ill feelings.
60s: Legacy Planning
Fine-tuning your estate plan becomes imperative as retirement comes closer. Review your plan at regular intervals (every 3 to 5 years) to ensure it reflects changes in laws, assets, and personal circumstances. We can help you include provisions for a new grandchild, or even disinherit a child, if needed.
You and your spouse might want to look into protecting your right to Medicaid benefits with irrevocable trusts. These trusts protect your family home and precious assets if you need long-term nursing care.
Legacy planning now comes into focus, encompassing charitable giving and the distribution of assets to heirs. This may involve creating a family legacy plan that articulates your values and goals for future generations.
70s and Beyond: Ensuring Stability
In later life, estate planning pivots toward your daily needs and potential long-term care. You might consider giving away some of your possessions now, enjoying the benefits they bring to your loved ones during your lifetime. We can explore gifting strategies to protect these gifts from Medicaid’s five-year lookback period.
People often revise their advanced healthcare directives after experiencing the passing of their friends or family members. You may have changed your mind about life-saving measures, life support, or the person who should make critical medical decisions. Review your designations and provide comprehensive guidance for your loved ones to ensure your wishes will be followed.
We Guide You Through Estate Planning at Different Ages and Stages of Life
Estate plans are a lot like individuals: they adapt and grow as their needs change. Reviewing and updating documents to account for any changes in laws or relationships is an ongoing process. We stay with you as you perform estate planning at different ages and help ensure that your estate plan is clear and ready to be executed when needed.
No matter when you first create your estate plan, you should consult with an attorney every few years to ensure it still accomplishes your goals as efficiently as possible. Email us at [email protected] today or schedule a 15-minute call so we can help you be a hero to your family.