When Should I Think About Estate Planning?

One of the questions people have when they find out that part of your legal practice is estate planning is, “When do I need to think about a will?” This seems like a pretty straight-forward question but the answer is not so clear-cut.

The easy answer, and the one most commonly offered by estate planners is yesterday. That answer stems from the idea that preplanning is always best and also that you never know what is going to happen in life. While I agree that there is never a bad time to ensure you have your affairs in order, I think there are specific milestones that necessitate different minimum levels of planning people should consider.

The first milestone many people reach is children. Whether you are married or not, having children means you really should, at minimum have a will. A lot of young parents feel that since they do not have many assets a will is unnecessary but without a will, the courts will decide custody of your young children. Depending on your wishes and the family situation this may or may not be a good thing. Ultimately, for something as important as your children, it is worth the time to make a proper will.

Whether it comes before or after children I think the next milestone should be at the purchase of a home, business, or inheritance of some other major asset. If you buy a home or become the owner of some type of major asset you really should think about how you want to protect it. The method and approach is different for each type of asset and every individual situation. That said, protecting your major assets is always a good idea.

The third milestone should be at around the age of 50. These days 50 is no where near “elderly” but the onset of health issues does begin to increase at this point and people have usually accumulated enough to warrant more planning than just a will. It is also important to know that, depending on your situation, Medicaid has a 5 year look-back period for transfers. You may not think you will ever need Medicaid but nursing home care in Ohio is approximately $6,000-$10,000 per month and failing to plan ahead for long-term health issues can result in substantial estates being eaten up quickly.

The final milestone is not really a milestone but more of a crisis intervention that happens all too often. It is not uncommon for people to avoid estate planning until the find themselves or their spouse in need of long-term care. At that point, they will find that they need to qualify for Medicaid as soon as possible and will be scrambling to preserve their assets and or income. If you find yourself in this situation it can be expensive but there are ways to minimize losses and still qualify for assistance.

Ultimately, there is no single “right time” for estate planning and the amount and type of planning vary substantially per person. That said, if we look at estate planning as a process to work through as we reach various milestones in life it becomes easier to understand.