Don’t Wait Until It’s Too Late: Key Dates for Estate Planning

AC/DC makes the highway to hell sound pretty fun: livin’ easy, party time. Being lackadaisical is a terrible approach to take with estate planning, though. [Dear AC/DC, I’m sorry.] Estate planning is one of those things that’s easy to put off, but waiting too long can leave your family and assets unprotected and your family having to deal with probate court. Comparing probate court to hell is a bit extreme, but it’s still something to avoid if you can.

The good news? A solid estate plan gives you control over what happens, both while you’re living and after you’re gone. If you don’t have one, or have one that’s inadequate, your nearest and dearest will most likely end up managing your estate in probate court when you pass, which is time-consuming and expensive compared to what can happen with a good estate plan.

Here are the most important estate planning dates to keep on your radar.

When’s the Best Time to Start Estate Planning?

• Turning 18 – Once you’re legally an adult, you may want to designate someone other than your next-of-kin to make medical or financial decisions for you, or to serve as a backup if they can’t be reached in time. To do that, you must have formal powers of attorney in place. These are documents specific to each state, but they are usually called power of attorney for health care and power of attorney for property, or something similar.
• Major Life Events – Getting married, having kids, buying a house, getting divorced, having parents or siblings die, or starting a business are all milestones that should trigger the start of estate planning or a review of your estate plan.
• Age 50+ (or Earlier if You Have Assets or Dependents) – By this point, you should have a will, powers of attorney, and possibly a trust in place. The earlier you plan, the better protected your loved ones will be.

Key Dates for Updating Your Estate Plan

Estate planning isn’t a one-and-done deal. Life changes, laws change, and your estate plan should evolve with them. Here are key times to review and update your documents:

• Every 3-5 Years – Laws and personal circumstances change, so review your estate plan regularly and ask your lawyer if there are any changes to the law that should be incorporated.
• After a Birth or Death in the Family – Adding or losing a family member can impact your beneficiaries.
• Marriage or Divorce – These will affect your estate planning needs and goals. For example, your spouse may have automatic rights or need to be removed as a beneficiary.
• Buying or Selling Major Assets – Your will or trust should reflect your current assets.
• Changes in Health – If you or a loved one faces a serious medical diagnosis, it’s time to review powers of attorney and healthcare directives.
• Moving to a New State – Different states have different estate laws, and your plan may need adjustments.

Wills vs. Powers of Attorney: Who’s in Charge & When?

A power of attorney (POA) allows someone you trust to handle your finances or make healthcare decisions on your behalf—but only while you’re alive. Once you pass away, your will or will and trust take over. Let’s look at important dates for powers of attorney.

• When Does a Power of Attorney Take Effect? You Get to Decide
  • Immediately – The person you name can act right away if you choose that option.
  • Only If You’re Declared Incompetent – This is called a springing power of attorney and requires medical confirmation of incapacity or a determination by family members that you are incompetent to manage your own decisions.
• When Does a Power of Attorney End?
  • The moment you pass away, or
  • If you revoke it while still mentally competent.

Final Thoughts: Don’t Let Time Run Out

The best time to start or update your estate plan? Before you need it. By planning ahead, you ensure that your wishes are honored, and your loved ones aren’t left scrambling.

• Death and incapacity can be sudden and unexpected, so waiting until you are elderly may be too late.

• You also can’t execute powers of attorney, wills, or trusts if you are mentally incapacitated. Instead, someone will have to go to court to be declared your guardian.

• Gambling with time if you wait until you are diagnosed with a terminal illness is risky, as sometimes plans don’t get finished before you pass.

If it’s been a while since you last reviewed your estate plan—or if you haven’t started—now is the time to act.

Do you have estate planning questions? Drop them in the comments!