Wooden blocks in the outline of a house with "Estate Planning" written on the foundation blocks

Who Needs Estate Planning?

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Craig Lemoine, Ph.D., CFP®, Director of Consumer Investment Research  

Estate Planning isn’t fun to think about. No one wants to talk about dying. And that may drive us to avoid the conversation altogether. But estate planning is so much more than terminal actions – it helps set a stage for a rich life while protecting against unnecessary taxes and family feuds.  

Who needs estate planning? Anyone with dependents, retirement accounts, life insurance or real property. The kind of estate planning may vary, but in the end most of us need a scaffolding for success.  

Estate Planning in Your 20s 

In your 20s, estate planning is about mapping the “what-ifs” of life. A great way to begin is by setting beneficiary designations on employer and individually owned life insurance policies.  

A beneficiary is the person or entity who receives the death benefit of an insurance policy, or retirement account proceeds at the death of an insured or account owner. Beneficiary designation transfers through life insurance policies or retirement plan assets often comprise the bulk of a younger person’s estate.  

Make strategic decisions when purchasing a first house, if you are married consider different forms of joint ownership that make the most sense for your family.  

Consider meeting with a qualified estate planning attorney to draft a will to direct any assts that won’t be passing through beneficiary designations or by operation of law/titling. An attorney can also help draft durable powers of attorney for health care and the management of your financial assets. Power of attorney documents allow someone to make decisions on your behalf if you become incapacitated.  

Lastly, an attorney can help establish a living will and a less form letter of last instruction, informing your loved ones what types of life-sustaining care you would want and where to find assets, policies, passwords and important documents.  

If you have young children estate planning takes on additional complexity. Where beneficiary designations, titling, a will and power of attorney documents may be all that was needed getting started in life; consider meeting with an attorney in your state to discuss guardianship agreements. Guardianship agreements help courts determine custody of children in the event parents prematurely pass.  

Estate Planning in Your 30s and 40s 

In your 30s and 40s wealth accumulates. At some point, coordinating trusts and charitable giving into your current life and estate plan may better align with your goals. These tools help distribute assets more cleanly to loved ones, provide structure to your long-term estate plans and help change the world in directions that are important to you.  

Meeting with a financial planner, tax professionals and attorney will help you prepare more complex documents that work alongside your assets and insurance policies to ensure an estate plan meets with success.  

Estate Planning in Your 50s and 60s 

As we approach retirement, beneficiary designations and retirement plan distributions take on new meaning. Both a two-million-dollar 401(k) retirement plan and a $4,000 IRA pass to their named beneficiary at death.  

What happens if you don’t have an estate plan? Not having a living or named beneficiary would cause both accounts to revert to the estate of the account owner, which can result in a very high tax bill.  

Paying $1,500 in tax on a $4,000 IRA is survivable. But paying $800,000 in unnecessary taxes from the 401(k) can spell disaster for a family. Working with a financial advisor to review your beneficiary designations will ensure your assets effectively head to their intended destinations.  

Estate Planning in Your 70s and Beyond 

Later in life, estate planning begins to incorporate larger and more meaningful legacy decisions. Questions simply become bigger in our 70s and 80s.  

How do we pass on our values? Is equal fair? Is fair equal? How do we divide farmland inherited from grandparents? What do we do with our home? Antiques we’ve inherited? How do we leave gifts to multiple generations? What charities and organizations can we empower and how do we best give to them? How can we mitigate the negative consequences of estate tax? 

More complicated estate planning requires meeting with a qualified and experienced estate planning team. That team likely has a financial planner, an insurance agent, an estate planning attorney and an accountant. 

Why Estate Planning Is Important 

Having an estate plan ensures your wishes, goals, hopes and dreams are possible for your family well after you are gone. An estate plan is the foundation to leave a legacy for your community and the world around you.  

Yes, estate planning has up-front and periodic costs. You’ll pay an attorney for a consultation and likely to draft documents. And as you age and accumulate wealth, periodic check-ups and new or revised documents may cost thousands of dollars. But when contrasted with the costs of not planning, paying for an estate planning team and possible insurance premium costs are worth their weight in gold.  

Have Questions About Estate Planning? 

Talk to a qualified financial advisor today to get the professional advice you deserve. Need help finding a financial advisor in your area? Give us a call today so we can match you with an advisor who will put your needs first.   

For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its
representatives may give legal or tax advice. 

Craig Lemoine is not affiliated or registered with Cetera Advisor Networks LLC. Any information provided by Craig Lemoine is in no way related to Cetera Advisor Networks LLC or its registered representatives.  

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Wooden blocks in the outline of a house with "Estate Planning" written on the foundation blocks

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