Estate planning is one of the vital parts of any financial plan.
You might think that estate planning  is only for old people, or only for rich people. But the reality is that people of any age  and any financial means can benefit from thinking about what will happen to your money after you’re gone…and what will happen to your loved ones should that time come earlier than expected.
Here is how to get started with your estate plan at any age.
Estate Planning In Your 20s…
- Name beneficiaries: As you start your first “real job” and open bank, retirement and other financial accounts, you will almost always have the opportunity to designate a beneficiary to receive the assets in the event of your death. If you don’t name one or more beneficiaries, the assets in these accounts will be frozen until your estate is sorted out in probate court after your death. Naming a beneficiary will enable your heirs to access the funds sooner.
- Consider a simple will: If your assets and liabilities are both minimal, your estate won’t be difficult to sort out. Even still, you should consider a very simple will as part of estate planning basics. If you are unmarried with no children and die without a will , your assets will most likely revert to your parents. If your parents are divorced and you would want only one to inherit your assets, you need to state that in a legally binding document. Ditto if you want to leave items to a significant other or a relative or friend who is not your parent, spouse or child. A financial planner and/or attorney can help you identify when you need a will and help you write one.
- Create a living will and designate a medical power of attorney: Unmarried people are at risk of having their wishes fall through the cracks should a medical emergency happen. And even married people might want to state their wishes in writing so that there are no doubts. Have an attorney draw up documents  stating who can make medical decisions in the event of your incapacitation, and stating whether you would want to be kept alive using artificial means in the case of an accident or illness. Make sure that the person you designate as your power of attorney is aware of your wishes. If you would want the decision to be made by multiple people (say your significant other and your parents), state that too but understand that it still makes sense to designate one person to have the final say so. Finally, if you want to allow non-relatives to have access to your medical information and to visit you in the hospital, state that as well.
- Research life insurance options: If you’re single with no debt, you don’t really need to purchase life insurance. Many employers offer a minimal amount for free or at a very low cost as part of your benefits package, and that amount should be enough to cover final expenses such as funeral costs  if your loved ones are unable to do so. If you have outstanding debt, you might consider a very small policy that can pay off the debt in the case of your death. And of course if you have a spouse or children who need your income, you will need a larger policy . Make sure to research the different types of policies , and get several quotes to get the lowest premiums.
Estate Planning In Your 30s…
- Update life insurance: By your 30s, you will probably have accumulated more assets (like a house) and also more debts (such as the corresponding mortgage). You may have also had children  who are now dependent on your income for everyday living expenses as well as bigger items like college. Make sure that you purchase enough life insurance to provide for them in the event of your death for income you will need beyond social security survivor benefits , and that the policy can also pay off any debts that your spouse would need paid off to continue living a reasonably similar lifestyle – mortgages and car notes are the big items here.
- Revise your will: Make sure that your children have a designated guardian , who has consented to raise them in the event of you and your spouse’s death. Make sure that you and your spouse have talked about the assets you each brought into the marriage as well as any that you accumulated together. If you would want to make sure your parents are provided for even in the event of your early death, have that written into your will. If you want assets to go to anyone besides your spouse and/or children, make sure that is reflected as well.
- Update beneficiaries: Recognize that your beneficiaries will probably change over time. If you initially designated your parents as beneficiaries of accounts such as your 401(k), you may need to update that to your spouse. If you get a divorce and/or remarry you will also need to update your beneficiaries. Recognize that named beneficiaries on specific accounts take precedence over a will – so if your will leaves “everything” to your spouse but your 401(k) names your parents as beneficiaries, your spouse will have no legal claim to your 401(k).
Estate Planning In Your 40s…
- Update life insurance: Once again, make sure that your life insurance policy reflects the needs of your family at the given time. Also recognize that if you own the policy its face value is considered part of your estate at death, and could ultimately be taxable to your heirs. So your spouse or children should actually purchase and benefit from the policy, even if you give them the money to pay the premiums.
- Create a gifting strategy: By the time you’ve reached your 40s, you’ve been accumulating wealth for close to twenty years. If you’ve been judicious with your savings and/or made some good investments, you could be sitting on a nice nest egg by this point. Your assets may be subject to tax  at death, so start creating a plan to give some of them away. You should take advantage of “annual exclusion ” gifts each year, which allow you to give up to $26,000 per couple to an individual each year. You should also make strategic gifts to charities and non-profits.
Estate Planning In Your 50s…
- Reevaluate life insurance: Up until this point, you have probably needed to add to your life insurance policy over time. By your 50s, you may be able to decrease the value of your policy or get rid of it altogether. If you have paid off your major debts or have the money to do so, and have saved enough to send your children to college, your spouse may be able to maintain a perfectly acceptable lifestyle using only retirement savings amassed to this point. Since premiums also will increase with age, you should do a careful analysis to see if paying them is still necessary. You can also check out these options for using life insurance during life .
- Look into Long Term Care insurance: Nursing homes or long hospital stays can cost hundreds or even thousands of dollars per day, and Medicare only goes so far. Long term care insurance  will pay for skilled nursing care and/or a nursing home for a long period of time. The best policies will increase their payout over time to keep pace with inflation. If you have serious assets you may think you can afford your own long term care. In reality, you may be able to afford it – but it will suck up all your assets if you end up with a truly chronic condition that keeps you in a hospital or nursing home for months or years. If you want to leave assets for your spouse and/or children, long-term care premiums may be worth it. If you wait too long, premiums really skyrocket. Experts seem to agree that your 50s are the optimal time to begin thinking about this.
Estate Planning In Your 60s and Beyond…
- Expand your giving: As you need less money, you can afford to give more of it away – this has the added benefit of reducing your estate taxes later and possible giving you a charitable deduction now.
- Maximize tax planning: A financial planner and attorney can help you set up trusts  that benefit your spouse and/or children to shield your assets from estate taxes . This is a concern for fewer people as the minimum for a taxable estate has increased over time  – but as Congress looks for more and more ways to plug rising deficits, you can’t count on any tax-related laws to stay the same.
- Look into other trust options: A Charitable Remainder Trust  allows you to donate a large sum of money to a charity, take a deduction for that amount up front AND get a stream of income during your life, with the remainder amount at your death staying with the charity. You might also consider setting up trusts for you children or grandchildren, especially if any of them have special needs .
What other things are you considering as part of your estate plan? Tell us in the comments!