Estate Planning: Why It’s Essential at any Age
By Jeff Gilbert
Ever wondered if estate planning is just for the wealthy or those in their golden years? It’s not at all! Whether you’re just starting your career in your 20s or enjoying the quiet of retirement, estate planning is important for everyone.
Yet, according to a 2024 survey, only 32% of Americans have formal estate plans, leaving most people without a clear say in their end-of-life decisions. This often means someone else—or even the State—will make those choices. In this article, we dive into why estate planning is a smart and necessary step no matter where you are in life.
Starting Out: In Your 20s and 30s
Feeling invincible? We all do when we’re just starting out! These early years are when you least expect to need an estate plan, which is exactly why it’s a critical time to have one. Early estate planning helps clarify your wishes—however straightforward they may be at this stage—so they are clear and actionable.
Take Stock of Your Finances: Create a list of bank accounts, investments, real estate, and any other valuable assets. This first step helps you organize your financial life, right from the start.
Create a Will: It’s important to recognize that it’s not necessarily about the size of your estate but about making your wishes known. A well-drafted Will helps outline exactly how you want your assets distributed after your passing, and is a great way to look after your family if you can’t be there—especially if you have minor children.
Consider a Durable Power of Attorney (POA) and Healthcare Proxy: Unexpected events don’t wait until you’re older. Establishing a POA and healthcare proxy early allows you to designate someone you trust to handle your affairs if you can’t. A POA specifically authorizes this individual to manage your financial and legal matters, while a healthcare proxy empowers them to make medical decisions on your behalf.
Set Up a Living Will: This document helps you lay out your wishes for medical intervention—a crucial piece if you’re unable to communicate those decisions yourself.
Building and Growing: In Your 40s and 50s
By the time you hit these middle years, life’s gotten a whole lot richer—both in terms of assets and complexity. Maybe you have kids, your dream home, or a thriving career. This stage is full of both financial and family growth, which makes it a great time to reassess and reinforce your estate plan.
Life Insurance Check-up: A key consideration for any estate plan, life insurance offers a safety net for your family that can help support them in your absence. But as your life evolves, so do your life insurance needs. That’s why it’s essential to reevaluate whether your coverage reflects your current situation.
Consider a Trust: Beyond a Will, a Trust is another way to manage and safeguard your growing assets. And despite what you may have heard, Trusts aren’t just for the wealthy. They are legal arrangements that allow for control over asset distribution, often avoiding probate and addressing specific wishes in estate planning.
Update Your Beneficiaries: Life changes—and so should your estate plan. Make sure the beneficiaries listed on your Will, insurance policies, investment accounts, and retirement accounts match your current wishes. Here’s one more thing to consider: it’s a good idea to review your beneficiary designations and Will at least every three years, or whenever you experience major life changes like marriage, divorce, the arrival of a new baby or grandchild, retirement, or a significant health event.
Pre-Retirement: Sharpening Focus in Your 60s
On the brink of retirement, now’s the perfect time to fine-tune your estate plan. The decisions you make now can significantly impact your legacy and retirement years, so it’s important to focus on strategies that reflect your upcoming lifestyle changes and the influence you want to have.
Advanced Trust Planning: Strategies like Charitable Remainder Trusts or Irrevocable Life Insurance Trusts can help you extend your legacy far beyond your lifetime. These sophisticated tools are capable of far more than just reducing taxes—they offer you the opportunity to support the causes close to your heart in a significant and enduring way.
Business Succession Planning: If you’re a business owner, what’s your exit strategy? Including a clear succession plan or buy-sell agreement in your estate plan is vital for your business’s continuity. A well-drafted and funded buy-sell agreement supports smooth transitions, helping to manage disruptions or financial difficulties when you leave. Plus, it can also provide for your family financially if you pass away or cannot work. Without such planning, your business could pass to heirs who are unable or unwilling to operate it, leaving your business legacy at risk.
Tax Strategies: With a substantial estate, it’s critical to engage in tax planning to effectively transfer wealth to your heirs—and not to the IRS. This includes several strategies, like setting up Trusts, making charitable gifts, and gifting assets during your lifetime. Each of these is designed to reduce your estate’s tax burden while helping you fulfill your legacy goals.
Your Enduring Legacy: Retirement and Beyond
By this stage, many people are tempted to think they’re done planning. But retirement isn’t the finish line for estate planning. In fact, it’s a pivotal time for maintaining, updating, and shaping the legacy you’ll leave behind.
Estate Review: Regular reviews with your estate planning team can provide confidence that your plan will remain effective. Changes in laws, financial circumstances, or even family dynamics can all impact your estate plan, so checking in regularly helps keep it current.
Charitable Giving: What is the vision for the wealth you’ve built? For most people, leaving a legacy isn’t just about assets, it’s about making a difference. If this sounds like you, consider how charitable giving fits into your estate plan.
Gift Wisely: Gifting assets during your lifetime allows you to take advantage of the gift tax exclusion, potentially reducing the overall estate tax burden. Typically, you can give gifts up to a certain limit (determined annually) to as many people as you like without affecting the lifetime gift exemption amount. Plus, this lets you witness the impact of your generosity firsthand.
Prepare for Tomorrow, Starting Now
Your estate plan goes beyond paperwork—it’s a representation of your hard work and the principles you hold dear. As life evolves, so too should your estate planning strategy, adapting to each new phase.
Whether you’re in the early stages of wealth building or preparing to pass on your legacy, the steps you take today can greatly impact the future. At Balboa Wealth Partners, we’re committed to helping you navigate every stage of the journey.
For customized guidance and to create an estate plan tailored to your unique needs, contact us at 949-445-1465 or email me at [email protected].
Scottsdale office: 480-801-5010, [email protected]
About Jeff
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email [email protected].
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
