6 Important Milestones for Estate Planning

Throughout every adult’s life, there are milestones and events that require legal planning to ensure that you Plan, Protect and Provide for yourself and your loved ones.

Follow the journey of our hypothetical client named Jane through six important life events in which she needs Estate Planning and relevant legal documents.

Milestone #1 – Jane Turns 18

When Jane turned 18 years old and became an adult legally, her parents no longer have any decision-making authority over her.

Anyone who reaches 18 (whether they’re going to college or getting a job) should have a Durable Power of Attorney and Advance Directive with Health Care Proxy. These documents authorize parents to make medical decisions and manage financial affairs if the 18-year-old becomes incapacitated or unable to make decisions.

Milestone #2 – Jane Gets Married

When Jane got married, her spouse became the single most important person in her life. This is also when Jane may:

• Change her Power of Attorney and Advance Directive with Health Care Proxy to appoint her spouse as her primary decision maker
• Prepare or update a Last Will and Testament to make sure her spouse receives her assets if she passes away.
• Update or create Beneficiary Designations and establish Joint Accounts with her spouse as these instruments aren’t controlled by her Last Will and Testament.

Milestone #3 – Jane Has Children

When Jane has children, the focus becomes providing for them financially and making sure people are in place to care for them if anything happens to her.

She can use her Last Will and Testament to accomplish this goal, and she might also:

• Incorporate Trusts into the planning process. Assets left to her children would be used for them, but managed in the manner she directs in the trust document.

Milestone #4 – Jane’s Children Turn 18

When Jane’s child turns 18 and becomes an adult, it’s Jane now who needs to be authorized by her daughter or son to step in if the need should occur.

Jane’s child now needs a Power of Attorney and Advance Directive with Health Care Proxy. This is also the perfect time for Jane to review her own:

• Last Will and Testament
• Trusts she might have
• Beneficiary Designations
• Joint Account Owners

While Jane’s child is now legally capable of owning and controlling his or her own assets, many parents don’t think an 18-year-old is mature enough financially to take possession of an inheritance they might receive.

Jane may consider a Trust so her assets are secure and protected until she believes her adult child can manage it effectively for themselves.

Milestone #5 – Jane’s Parents Become Elderly

At this milestone, Jane’s focus may shift to her parents. She may need to step in and help them, as they helped her growing up.

Elderly parents often recognize the need to review and update their plans. If they don’t, then Jane needs to help her parents understand their changing needs and take action.

At this point, Jane and her parents should:

• Review their Estate Planning goals
• Update legal documents, if necessary
• Consider incorporating Asset Protection Strategies into their plans to protect assets from unexpected long-term care costs

If they haven’t already, Jane’s parents may appoint her to make decisions for them via their Power of Attorney and Advance Directive with Health Care Proxy documents, so she can step in to help them if they want assistance or lose their ability to manage their financial affairs.

Milestone #6 – Jane Becomes Elderly

One day Jane realizes the time has come when she needs her children to help her.

To make sure the right people have decision making power over her future financial and medical affairs, and ensure her assets pass to her children and grandchildren, Jane may want to:

• Appoint her children to be her decision-makers in her Power of Attorney and Advance Directive with Health Care Proxy
• Review her Last Will and Testament, Trusts, Beneficiary Designations and Joint Account Owners
• Take necessary steps to protect her assets from the cost of long-term medical care (including assisted living and nursing home care).

With time to plan, Jane can protect her assets in advance of her needing long-term care. She might use a Gift Trust to accomplish this goal.

If Jane hasn’t done any asset protection planning and unexpectedly finds herself in need of long-term medical care, she risks outliving her assets and not being able to ultimately provide for herself or her loved ones. However, it’s often possible to protect assets using Medicaid Crisis Planning.

Now is the Time – Plan. Protect. Provide

Don’t let yourself be caught off guard. Huge life events will happen! Take the action needed to keep your estate plans current at every milestone to protect yourself and provide for those you love.