Three Common Life Stages and Their Effect on Estate Planning
By Taylor Kenck
Just as the seasons change, our lives also follow common patterns and seasons that can affect our estate planning needs.
Introductiom
Over the last several months, I have noticed that the vast majority of my clients fall into three different life stages. Each of these stages have different estate planning needs and solutions. For this reason, families that have done planning at one stage may find that their previously-executed plans no longer fit their needs.
In this blog post, I want to address three common life stages I see, and the typical needs of clients at each stage.
Stage 1: Young families–prioritizing guardianship nominations over formal estate plans
Young couples historically are NOT good at estate planning. Truthfully, they are not entirely wrong to prioritize other things.
For the most part, young couples do not have the type of assets or property that need the protection of a will or trust. For example, home ownership among the “Millennial” generation barely eclipsed 50% in 2022. Additionally, young couples often prioritize paying off debts over accumulating wealth.
When young couples do not own real property or significant assets, they generally don’t need a will or trust to meet their estate planning goals. Technically speaking, individuals that do not own “real property” (a house or land) or have assets valued above $100,000 have a “small estate” that does not need to pass through probate.
That being said, young families often have considerations that are much more important than property or assets:
THEIR CHILDREN.
Guardianship nominations are often the most important considerations for young families. As described in a previous blog post, guardianship nominations can be done in wills or powers of attorney documents. For this reason, if a will is not not necessary or affordable for a young family, a power of attorney can still accomplish their biggest goals.
So, while traditional estate planning might not be necessary for young families, small, affordable steps can be taken to meet crucial needs like a guardianship nomination.
Stage 2: Retirement stage–creating a comprehensive plan to meet your golden years
The second life stage I commonly see is with clients that are newly retired or preparing for retirement. This group of clients often is able to create very meaningful and comprehensive estate plans. These plans serve as a major source of relief for clients—I find that the transition into retirement is very stressful for a lot of people; having an estate plan “checked off their list” is a huge burden lifted off their shoulders.
For clients that have reached this retirement stage, we naturally prepare for two scenarios: (1) a long and healthy life (the “golden years”), and (2) a sudden emergency. Statistically speaking, Washington has one of the highest life expectancies in the U.S. So for most clients, our “golden years” plan will likely come to fruition. That being said, sudden emergencies—medical or otherwise—do occur, especially among individuals at or beyond the retirement age. So, planning for both contingencies is a best practice.
In the sudden emergency scenario, it is important to have strong and comprehensive powers of attorney in place. For most clients, this includes a medical power of attorney and a financial power of attorney. You can find more information about powers of attorney here.
For individuals that have reached this retirement stage, they often have a good understanding of their loved ones’ situations and needs. This allows us to support loved ones with difficult circumstances like disabilities or even lifestyle concerns (like addiction or spending problems). Additionally, clients at this stage often have a good understanding of the loved ones that would make good trustees or personal representatives of their estate plans.
One final consideration for individuals in this stage of life is flexibility. Life moves very quickly, and circumstances can change. For this reason, I prefer creating estate plans with built-in flexibility that allows for changes in the future. While this is not always possible, I have found that individuals at this stage in life especially appreciate any available flexibility.
Stage 3: Final considerations and changes for elderly clients
The third life stage I frequently encounter with clients is the final stage of life. Clients at this period have complex needs, and the needs are very often urgent. Unfortunately, sometimes the needs cannot be met, often because proper planning requires years that the client does not have. However, most clients’ needs can be met in affordable, professional ways.
Planning at this stage is most successful when a comprehensive plan is already in place. At that point, many clients only need small changes, which can be met with simple amendments to their existing plans.
For clients with existing plans, I find that the most common changes are often:
Changing the personal representative;
Adjusting the powers of attorney so that they are effective immediately;
Giving a loved one with prior struggles access to more of their estate.
Clients at this stage value simplicity. I have had a number of clients with comprehensive trust-based plans that instead choose to simplify and adopt a will-based plan instead. At this stage of life, many of the concerns they had with loved ones have been resolved—as children or grandchildren mature, many struggles naturally resolve themselves. These changes often permit the push to simplify.
Ultimately, clients at this stage are most successful when a comprehensive plan is already in place. That way, we can focus on amendments and changes that better reflect their changing circumstances.
Conclusion
These three stages described above reflect a large chunk of the estate planning clients that Crestview Law serves. As a result, Crestview Law has a strong understanding of the needs of individuals at each of these stages.
Proper, proactive planning is a key to all of these stages. Sometimes proactive plans are simple, and other times they are comprehensive. However, proactive planning is key to preventing urgent, emergency needs that sometimes cannot be met.
Please click here Crestview Law to schedule a free initial consultation to find out more.
Crestview Law has physical offices in Wenatchee, but we can serve clients throughout Washington with our many virtual tools.
