Personal Finance

What’s Age Got To Do with It?

What’s the “right” age to begin estate planning? Twenty-five? Fifty? Eighty? If you think about it, age isn’t really the most important consideration. Estate planning has more to do with life stages than with age. So, whether you’re 30 or 90, your individual wealth and the loved ones who depend on you are the factors that should drive your planning efforts.

The Single Life

When you’re young and single, with no family responsibilities — and few assets — you probably won’t need much in the way of formal planning. But, once you acquire money, investments, or property, having a will allows you to pass those assets to whomever you choose. If you die without a will, state law will decide what happens to your property.

Family Ties

Once a spouse and children enter the picture, you’ll want to begin estate planning in earnest. Both you and your spouse should have wills. Unless you have a large estate that you need to shelter from estate taxes, you’ll probably want to leave assets to each other. Your will should also name a guardian for your minor children; otherwise, a court will appoint one if something happens to both you and your spouse.

Reelin' in the Years

You’ve accumulated a little money, and you want to pass as much of it as possible to your loved ones. A variety of trusts — from a simple revocable living trust to more complex trust arrangements designed to benefit charities and minimize taxes — can help with estate planning. If you have a lot of assets and want to reduce your estate, you can also give away property of up to $14,000 annually ($28,000 if your spouse joins in the gift) to as many people as you choose during your lifetime without paying gift tax or estate tax on the assets.

An Added Precaution

At some time during your planning, you should execute a durable power of attorney and a durable power of attorney for health care (sometimes known as a health-care proxy). These documents allow you to designate someone to make financial or medical decisions for you should you become incapacitated. If you don’t have these documents in place, a court can appoint someone to act on your behalf.

Source: DST

Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

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