Estate Planning in Your 30s – 7 Reasons You Should Plan Now
Our 30s bring many great opportunities, such as better jobs and salary, marriage, and the addition of children and pets. With so many potential changes, this period is the perfect time to start considering estate planning. We understand the term estate planning may be daunting for some. You may also think that it’s only for those who have a large amount of assets, are sick, dying soon, or in retirement.
While those situations would benefit from estate planning, they’re not the only ones. There are several benefits to getting ahead of your estate planning efforts. Here are seven situations commonly confronted in your 30s where estate planning can yield numerous benefits.
1. You’re a Newlywed
We understand it’s difficult to think about losing a spouse. Being prepared will help reduce anxiety amid an emergency and give you time to focus on your new life together. If something happens to you or your partner, it’s vital to have clear preparations in place. Without proper planning, you may run into situations that could severely slow down the process of transferring assets and stabilizing the future.
For example, if you’re not listed on your spouse’s bank account, you may not have immediate access to the account and will likely need a court to grant access to the account. Additionally, if your partner dies without a will, their property may be split in an undesirable manner. It’s essential to plan ahead to ensure all your assets are distributed in your preferred manner.
2. You’ve Bought Your First Home
Buying your first home is always an exciting event. But without proper planning, determining who would inherit your property can get tricky. If you have a will, ownership of your home will be transferred accordingly. If you don’t, deciding who gets ownership or how ownership will be split depends on your state’s laws.
Making a plan ensures that your property is distributed according to your specific wishes. Proper planning also prevents frequently emotional disputes during this process and enables your loved ones to grieve in a healthy manner without resentment toward each other.
3. You Have Minor Children
Your 30s may bring the responsibility of caring for infants and young children. While running back and forth between work and parenting obligations, making a long-term plan for your family may slip through the cracks. But making an emergency plan is one of the best things you can do for your family, especially your young children. Here are some plans to consider:
- Speak with legal professionals to determine the best estate planning documents to protect your children.
- Figure out the best guardian for your children in your absence. This is especially helpful if you are currently a single parent.
- Ensure all essential documents are in place so that assets you’ve worked hard for are bequeathed to your children. Proper planning can help your assets avoid the probate process.
- Keep your children’s medical records, birth certificates, and other vital documents in a secure location.
Be sure that you have everything to ensure that your children are well taken care of. In the event of your passing, you need to guarantee your children will receive proper care physically, mentally, and emotionally as they navigate a new world without you.
4. You Own Pets
Just as with your children, you should make a plan for your pets if something was to happen to you. Your furry friends deserve to be in the hands of someone you trust and know will give them the love they deserve.
In the estate planning process, your pets are considered property, so you cannot leave any property or money to them. You can, though, outline whom you’d like to pass ownership to and designate money for in order to continue their care. Depending on your local state laws, if you were to die without a will your pet could encounter the following situations:
- They may be passed down to your next of kin.
- Your pet may be passed to a local animal shelter.
- Your pet may be transferred to an animal rescue organization.
Start planning for your pet and having conversations with your loved ones about taking ownership of your pets. Additionally, you can start researching organizations that you trust to take care of your pets in the event of your passing.
5. You’ve Started a Business
We live in an age where more and more individuals are starting businesses and becoming their own bosses. But what should happen if you temporarily or perhaps permanently cannot run your business anymore? Who can you trust to run your business and preserve the integrity of your brand?
What happens to your business ultimately depends on the business structure (sole proprietorship, S-Corp, etc.) that you set up. With some business structures like a sole proprietorship, where the business and the owner are considered one entity, your company dies with you. With other business structures, you can create a trust to keep your business going after your passing.
It’s essential to have an exit strategy for your business. It ensures your business lives on after you and that you have someone well-trained to take care of the company.
6. You Have a 401k, Retirement, or Investment Accounts
Financial accounts such as 401ks, IRAs, and brokerage accounts typically take years to build, so it’s essential to protect your assets in them. Generally, these accounts will ask you to name a beneficiary at the opening, which is excellent and can make accessing these funds easier for your family.
You should make sure your family is aware of the process for claiming these funds and where to locate important documents. Missing or incomplete forms can delay your loved ones from receiving assets or stop the process altogether.
7. You Have Strong Preferences or Beliefs
We live in a very diverse world with people from different cultures and religions. What you deem acceptable may not be for someone else. It’s crucial to have the appropriate documents in place and discussions with your family. This helps your loved ones carry out your wishes if you’re unable to communicate them. Some topics to discuss with your family are your preferences on:
- Health procedures (blood transfusions, surgeries, etc.)
- After-Death Body Preferences
- Cardiopulmonary Resuscitation (CPR)
- Life-Sustaining Measures (feeding tube, ventilator, etc.)
The Importance of Estate Planning in Your 30s
Entering your 30s comes with a responsibility to protect yourself, your loved ones, and the assets you’re building. That makes right now the best possible time to begin the estate planning process.
Planning now will protect you and your loved ones if something ever happens. Giving them time to grieve instead of worrying about locating paperwork and accessing accounts.