When should you start Estate Planning?

When should you start Estate Planning?

Many people put off estate planning, thinking that it is something only older people should do when they retire and their kids are grown. But, unfortunately, unexpected tragedy can strike at any age, leaving your loved ones in a terrible situation, unsure of what you would want them to do and where your assets should go, and costing time and money. For example, if you pass away without a plan in place, Missouri’s intestacy laws will decide who gets your belongings and only after going through the long and costly probate process. If you haven’t stated your wishes in writing, someone you don’t want to may wind up making medical decisions for you that you do not agree with.

Even young people may have dependents that need support, minor children who need guardians, and strong preferences for how they should be treated should they be diagnosed with a terminal illness or have an accident that leaves them incapacitated and unable to express their needs. Because proper estate planning helps ensure that your wishes will be carried out as you want them to, the time to start estate planning is now, regardless of your age. Everyone who has reached legal adulthood should have an estate plan that will make sure their family, financial, and medical affairs are taken care of, and these should be updated regularly.

When Do You Need Estate Planning Documents?

Estate planning involves examining your individual situation and creating several documents that will affect you and your family in case you become ill or incapacitated and what happens after your death. Most of these documents should be prepared immediately, but others may be done at different stages of your life.

The following are the documents most people need to have and the timeframe for when they should be included in an estate plan:

Last Will and Testament: A will is a document that outlines your wishes regarding the distribution of your assets and property, the appointment of guardians for minor children, and the executor of your estate. To make a will in Missouri, you must be of sound mind and . . .

  • be 18 years of age or older, or
  • be an emancipated minor by court order, marriage, or entry into active military duty (Mo. Rev. Stat. § 474.310).

Your will generally must be signed in your presence by at least two witnesses who should not be beneficiaries, but oral wills are valid in some circumstances.

You should make a will as soon as you become a legal adult. It is recommended that you update your will every 3-5 years, and especially when life events occur such as buying a home or property, having children, getting a divorce, or inheriting money or other assets.

Revocable Living Trust: This document allows you to transfer assets to a trust during your lifetime. You still control assets while you are alive, but the trust goes to your named beneficiaries when you die, potentially avoiding probate and certain taxes.

Trusts are not for everyone, but they probably are a good idea if you have accumulated assets, such as property or other investments that you want to pass on without going through probate. If you are in this situation, the sooner you make a trust, the better.

Birk Law Firm highly recommends Revocable Living Trusts in most, but not all, situations.  There are many advantages of Revocable Living Trusts, with the main ones being the avoidance of Probate in all estates, and the avoidance or reduction of estate taxes in large estates.

Naming a guardian: In your will, you should name a guardian who will take care of your child in case of your death. Do this as soon as you have a child and do it again for each child that is born.  If you don’t name a legal guardian before you die, the court will choose who will care for your children, and this will not necessarily be the person you want and trust to do so.

Durable Power of Attorney: This legal document authorizes someone to make financial decisions on your behalf if you become incapacitated. You appoint a person to act as your agent, or attorney-in-fact, and make these decisions for you. Since a regular power of attorney is revoked if you become incapacitated in Missouri, the document must be made durable by stating, “This is a durable power of attorney and the authority of my attorney-in-fact shall not terminate if I become disabled or incapacitated or in the event of later uncertainty as to whether I am dead or alive.”

The durable power of attorney should also be made as soon as you reach legal majority.

Durable Power of Attorney for Health Care and Advance Health Care Directive: This document appoints someone (usually a close relative or friend) to make medical decisions for you if you’re unable to make them on your own. Your advance health care directive, or living will, states your end-of-life medical directives as to your wishes for your medical treatment when there is no expectation of your recovery from a terminal illness or injury and you are unable to communicate those wishes.

As medical emergencies can arise unexpectedly, even for the young and healthy, everyone should make a durable power of attorney for health care as soon as they reach legal majority.

Beneficiary Designations: By having a stated beneficiary that you want your life insurance policies, retirement accounts, and other assets to go to after your death, these assets can be passed on without having to go through probate. You can also make Transfer on Death (TOD) designations on your investment accounts for the same purpose.

You should specify beneficiary designations immediately and review them if you’ve had a life change like a marriage or divorce, a change in financial circumstances, or when your children become adults.

Get Help in Determining When to Start Estate Planning

Regardless of age or financial standing, everyone can benefit from the peace of mind that comes with having a well-crafted estate plan in place, so this is not something you should delay.  Cape Girardeau, MO, estate planning lawyer Kelvin Birk is fully prepared to help make sure everything is done correctly in accordance with Missouri law, and in a timely manner. Kelvin is a Certified Public Accountant as well as an attorney. This unique combination provides the broad knowledge and experience to solve both legal and financial issues that can arise in estate planning matters.

Putting off estate planning or making mistakes in doing so can be costly and lead to problems for you and your family, so the sooner you get started the better. The Birk Law Firm offers a free consultation to discuss your individual estate planning, so call us today at 573-332-8585.

Attorney Kelvin Birk

Attorney Kelvin Birk

Kelvin Birk is a lawyer as well as a certified public accountant, with more than 30 years of experience in accounting and tax and business consulting, and more than 20 years of experience in numerous legal matters. This combined expertise allows our law firm to provide a level of service above that of other firms. Whatever your legal situation, your attorney at Birk Law Firm can counsel you as to the tax implications. We have experience in providing myriad legal representation services to residents of southeast Missouri and other areas.. [ Attorney Bio ]