4 Reasons to Start Estate Planning in Your 40s

Your 40s are a hidden gem because of the stability you enjoy in your career and social life. During this era, many people often may experience positive, long-term changes to their financial and family situations. Having a plan in place for the future is the best way to protect your family members and assets in case you pass too soon. To help with this process, we want to share four reasons to help you start the estate planning pronto!

1. You Have Minor or Adult Children

As a parent, your instinct is to protect your children – in your presence and absence. Thus, it’s vital that you have an estate plan to ensure you get a say in what happens to your children once you’re gone. Depending on their ages, how you include them in your estate plan may differ.

How to Plan for Minor Children

For your young children, you should put great consideration into who you trust to take care of them. A will is a basic way to establish guardianship. We also recommend consulting with an attorney to tailor your plans to your family’s needs and local laws.

How to Plan for Adult Children

For your adult children, we’ll recommend the following course of action:

  1. Have conversations about the end of life as early as possible so your children know what to expect.
  2. Outline the assets you want to pass down. To prevent disputes, it may help to split assets between them evenly.
  3. Write down instructions to access various accounts, funds, and the claims process.
  4. Store your essential documents and passwords in a central, secure location. This is especially helpful in the instance your adult children no longer reside with you.

2. You Have Aging Parents

As you enter your 40s, it means your parents are often well into their 60s and 70s. While many people are healthy at that age, some need part-time or full-time care. If you are a primary caretaker for your parent, you should do two things:

  • Ensure their estate planning affairs are in order
  • Make arrangements in the instance that you pass before them.

You’ll want to make sure your parents have a suitable caretaker in your absence. If no family member(s) can take on the task, you can consider a full-time care facility for your parent. In that situation, we recommend the following:

  • Do your due diligence as you research your facility options
  • Ensure your parents have financial arrangements in place
  • Tell the rest of your family exactly what will happen

3. You Own Property and Other Real Estate

If you own a home, effective estate planning for your property is a must. Making these arrangements ensures the appropriate people can inherit your property. You can also create provisions for the sale of your property so that you provide financial security for your children in the future. Additionally, it prevents the decision from falling into the hands of the government.

4. You Have a 401k, Retirement Funds, or Other Investment Accounts

These types of financial accounts typically require you to name your beneficiaries when opening an account. Still, you must ensure that your loved ones can locate important account information after you pass.

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