By Steve Seals
Estate planning is important for everyone, not just the elderly and the wealthy. Despite common misconceptions, it involves more than just distributing your assets when you’re gone. It’s about providing for your future, safeguarding your loved ones, and confirming that your wishes are respected after you’re gone.
All the way from young people just starting out to established families and retirees, estate planning is an ever-changing process that needs to adapt to every life stage. For the people you care about most, not making a plan can result in needless legal complications, family conflicts, and financial hardship.
Let’s explore the significance of estate planning at each period of life, emphasizing the specific factors and strategies that apply to each stage.
Your 20s and 30s
These early years are a crucial period to develop an estate plan. Even if your wishes are simple at this point, early estate planning can make them understandable and practical.
- Review Your Finances: Create a list of bank accounts, investments, real estate, and any other valuable assets. This first step helps you organize your financial life—right from the start.
- Create a Will: It’s important to recognize that it’s not necessarily about the size of your estate but about making your wishes known.
- Consider a Durable Power of Attorney (POA) and Healthcare Proxy: Unexpected events don’t wait for you to get older. Establishing a POA and healthcare proxy early allows you to designate someone you trust to handle your affairs if you can’t.
- Set Up a Living Will: A living trust helps you lay out your wishes for medical intervention—a crucial element if you’re unable to communicate those decisions yourself.
Your 40s and 50s
Your life has likely increased in wealth and complexity by the time you reach your middle years. This stage is usually full of major personal and financial changes—the ideal time to revisit your estate plan.
- Review Life Insurance: Life insurance provides a safety net for your family that can assist in providing for them in your absence, making it an essential component of any estate strategy. Your needs for life insurance change as your life does.
- Consider a Trust: In addition to a will, a trust can help you manage and safeguard your expanding assets. Trusts aren’t only for the wealthy, despite what you may have heard.
- Inform Your Recipients: Your estate plan should adapt to the changes in your life. Verify that the beneficiaries on your insurance plans, retirement accounts, investment accounts, and will reflect your current preferences.
Your 60s
On the brink of retirement, now’s the time to fine-tune your estate plan. The decisions you make now can significantly impact your legacy and retirement years.
- Advanced Trust Planning: You can leave a lasting legacy by using tools like irrevocable life insurance trusts and charitable remainder trusts. These sophisticated strategies offer several ways to support your priorities.
- Business Succession Planning: What is your exit strategy as a business owner? The continuity of your company depends on your estate plan having a defined buy-sell agreement or succession plan.
- Tax Strategies: To properly transmit wealth to your heirs—and not to the IRS—it’s imperative to engage in tax planning. This includes a number of strategies, such as establishing trusts, donating to charities, and transferring assets while you’re still alive.
Retirement and Beyond
By this stage, many people are tempted to think they’re done planning. But retirement isn’t the finish line for estate-planning strategies:
- Estate Review: You can feel confident that your plan continues to work by conducting regular reviews with your estate planning team. Checking in frequently keeps your estate plan aligned with changes in laws, your financial situation, or even family dynamics.
- Giving to Charity: How do you envision the wealth you’ve built? For most people, leaving a legacy involves more than just material possessions; it’s about making a difference. If this describes you, think about how charitable giving fits into your estate plan.
- Gift Wisely: You can gain from the gift tax exemption by donating assets while you are still alive. Doing this can lower your overall estate tax liability. In general, you can give gifts to as many people as you desire up to a specific amount (set annually).
Get in Touch!
Your estate plan is a reflection of your ideals and life’s work—and should evolve along with your circumstances at every stage of life.
The right planning today can have a big impact on your future, regardless of whether you’re just starting to build wealth or preparing to leave a lasting legacy. At Seals Financial Planning & Investments, we’re here to guide you every step of the way.
Please give us a call at (859) 230-3476 if you would like to schedule a time to meet.
About Richard Stephen (Steve) Seals
Steve Seals is owner and independent Registered Investment Advisor Representative at Seals Financial Planning & Investments VI, LLC, a financial planning services firm based in Lexington, KY. As an independent Registered Investment Advisor Representative with about two decades of experience in the investment and insurance industries, Steve’s firm is founded on getting to know each client personally, allowing him to provide sound financial advice throughout their career and into retirement. With the mission of guiding clients on the path of success, Steve is fueled by his commitment to excellence and goes the extra mile to make sure clients are fully satisfied. He believes in maintaining a positive mindset, creating partnerships with a purpose, and always striving for significant outcomes.
Born in Jenkins, Kentucky, Steve grew up with a love for basketball and serving his community. After high school, he served nine years in the United States Marine Corps, then earned a bachelor’s degree in accounting. He was eventually able to put his degree and desire to help others to work as a fiduciary financial planner. Prior to founding his own firm in 2014, Steve learned from working with Edward Jones, US Bank, University of Kentucky Federal Credit Union, and CUSO Financial. He also received his Security Series 63 and 65/66 through Keystone Financial Group, LLC, and holds various life, health, and variable insurance licenses.
Steve and his wife, Angie, have three daughters (Lauren, Peyton, and Ashton) and two grandsons (Kenyon and Kai). Steve holds a private pilot’s license, and the family enjoys sports, spending time at the lake, and traveling. To learn more about Steve, connect with him on LinkedIn.
