Estate planning in your 20s, 30s, and beyond

If you're in your 20s or 30s, estate planning may not seem relevant. You're young and healthy, and your one-bedroom apartment is hardly an estate. As you reach your 40s and 50s, estate planning may be on your mind, and yet it's easy to procrastinate.

The fact is, everyone needs an estate plan. Estate planning makes things easier on your family and helps ensure your wishes are carried out. Here's what you need to think about estate planning in each decade of your life.

In your 20s and 30s: Planning for the unexpected

What if you had a terrible accident or suddenly got sick? Who would make decisions for you, take care of your children, and manage the details of your life if you couldn't do it anymore? Estate planning documents are a way to let your loved ones know what you would have wanted.

An estate plan in your 20s or 30s should include:

• A durable power of attorney. This document appoints someone to take care of the financial and legal side of your life if you can't do it yourself. Without a power of attorney, family members may have to go to court to get permission to pay your bills, deal with your landlord, sell property, or manage your personal business.
• A healthcare power of attorney. This document names someone to make decisions about your medical treatment if you are unable to make and communicate those decisions yourself.
• A will. A will can provide for unmarried partners and others who won't have any legal rights otherwise. It can name a guardian for your children. If something happens to you, you don't want the courts deciding who will raise your kids.
• If you have children, a trust. If you pass away, do you really want your children to get their inheritance in a lump sum when they turn 18? That's what will probably happen if you don't establish a children's trust to hold and manage the money until they're older.
• Advance directives. An advance directive or "living will" comes into play if you are terminally ill or in a persistent vegetative state and unable to communicate your wishes about care and life-prolonging procedures. The presence of a living will can help make difficult decisions easier for family members who won't have to guess at what you would have wanted.

Your estate plan doesn't have to be complicated or expensive, but a good estate plan will provide for the people you care about and help them carry out your wishes.

In your 40s: Updating and building on your plan

By the time you reach your 40s, your life probably looks different than it did in your 20s. You may have more money, you may have divorced, and your kids will be older. And, if you haven't done any estate planning yet, your 40s is a great time to start.

In your 40s, you'll still need the same estate planning documents that were important in your 20s and 30s. But your wishes for everything from guardians for your children to powers of attorney may have changed, and it's important to update your estate plan to reflect what you want now.

Your 40s is also a great time to encourage your parents to get their own estate plans in order. Good estate planning and communication now can save you a lot of uncertainty and heartache as your parents get older and situations change.

In your 50s and 60s: Planning for the future

In your 50s and 60s, it's time to revisit estate planning with an eye toward your own age. You may need updated powers of attorney and advance directives, and you may want to update your will or consider establishing a trust.

A revocable living trust can allow your estate to bypass the probate process—a lengthy and complicated procedure in some states. Trusts can help preserve your assets if you have to go into a nursing home. And they can provide for your spouse while preserving an inheritance for your children.

Trusts can be complicated, but a consultation with an estate planning lawyer can help you decide if a trust is right for you.

The best estate planning is done before you need it. Whether you're starting at age 22 or age 62, take actions today to get your affairs in order. It's never too early to put these documents and protections in place, so that your loved ones can know what your wishes are and later help fulfill them.