Your estate plan should grow up with you.
An estate plan isn't a one-time project. The documents that protect you at 18 look very different from the ones your family will rely on at 80. As your life changes through marriage, children, growing assets, and aging, your plan should change with it.
Here's what to have in place at every stage, starting at 18.
Turning 18: The day your parents lose access.
Once you're a legal adult, your parents can't automatically see your medical information or step in on your finances, even in an emergency. Three documents fix that by allowing you to appoint an agent who can help:
- Healthcare Directive (names vary by state)
- HIPAA authorization (sometimes part of the Healthcare Directive
- Durable financial power of attorney
Getting Married or Partnered: Your plan now involves two people.
Update beneficiaries on retirement accounts and life insurance. Review how your home and accounts are titled. Name each other (or whoever you choose) in your healthcare directives, powers of attorney, and wills. If you're unmarried, this matters even more, because the law may not recognize your partner by default or you may have other, specific beneficiaries to name.
Having Children: This is when a will becomes even more important.
A will is where you name a guardian for minor children. It's also worth considering a trust, since kids can't inherit outright, and money left to a minor may end up under court supervision until they're 18. Life insurance often becomes the backbone of your plan.
Midlife & Peak Earning Years: Time to revisit, not just maintain.
Assets have grown, and so has complexity. A revocable trust can help your family avoid probate. Take a fresh look at who you've named as executor, trustee, and agent, too. If those roles still go to parents who are now in their 70s or 80s, it may be time for a change. This is also a good moment to make sure your parents have their own documents in order, because their plan affects yours—especially if you’re the one designated to manage it.
Entering Retirement: From building wealth to passing it on.
Your adult children may now be the right people to serve as your agents, executor, or trustee. If you name them, let them know and tell them where your documents are. Retirement account beneficiaries matter more than ever, since many heirs must now empty inherited IRAs within 10 years. If giving matters to you, qualified charitable distributions from IRAs (available at 70½) can be a tax-smart way to do it.
The Later Chapters: Planning for the season when others may need to step in.
Make sure your powers of attorney and health care directive are current. Older documents can get pushback from banks and medical providers. Have an honest conversation about how long-term care would be paid for, whether through savings, insurance, or Medicaid planning, which works best well before care is needed. And share your wishes now, so the people you've named aren't left guessing when it matters most.
BIP Wealth, LLC (“BIP Wealth”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC as a registered investment adviser does not imply a certain level of skill or training. For more information about BIP Wealth, please refer to our Form ADV, available at adviserinfo.sec.gov or upon request.
This commentary is intended for informational purposes only and does not constitute tax or legal advice. Please consult your personal tax professional and estate planning attorney before making any tax or legal decisions. Investors should seek tax and legal advice based on your particular circumstances from an independent tax professional and estate planning attorney as laws are subject to interpretation, legislative change, and are unique to each individual's particular set of facts and circumstances. The opinions in this commentary are as of a specific date and are subject to change.
Sarah Watchko is an employee of BIP Wealth and has been serving families’ estate planning needs for nearly 20 years.
