Between age 40 and 55 is the time when most adults reach their peak earning years. If you are in this stage of your life, you may be experiencing significant life events, such as your children going off to college, getting married, and having children of their own. This is also the time when you start experiencing health issues, if you have not already, or you start observing health issues in your contemporaries and begin to feel more vulnerable yourself. By this age, a small but noteworthy percentage of your friends, co-workers and sometimes even family members in your same age group have died young.
Estate planning during your peak earning years can help you create a plan for your family's future and ensure that your wishes are expressed in advance in case anything unexpected happens to you.
Why is Estate Planning So Important?
Without an estate plan in place, negative events could affect you or your family. For example:
- If you become incapacitated without a living will, you may be subjected to medical treatments that are against your wishes, and a court may be asked to make difficult decisions about your treatment.
- If you become incapacitated without a medical power of attorney, your spouse will be left without the authority to make medical decisions for you.
- If you become incapacitated without a financial power of attorney, your spouse will be left without the authority to manage assets that are in your name alone or that require both of your signatures. To obtain such authority, your spouse will have to go to court to be appointed as your conservator, a process that often costs more than a complete estate plan would have cost had you planned ahead.
- Your spouse or significant other could be disinherited in whole or in part if you pass away without a will.
- Your estate will be distributed according to state statutes if you pass away without a will.
- If you chose a simple will as your estate plan (as opposed to a living trust-based estate plan), a court process will most likely be required to distribute your assets, which in some states can easily costs ten times as much (or more) as an estate plan would have cost had you planned ahead.
- Your family members could be forced to sue your estate, incurring expensive legal fees.
These are just some of the events that could arise if you do not have an up-to-date estate plan.
Control Your Future
Estate planning gives you the power to control what medical treatment can be administered if you become incapacitated. No one wants to think that something unfortunate could happen to them, but in the event that this occurs, it's always best to have a plan in place.
A living will can express your future wishes regarding medical treatment, such as:
- Whether you want to remain on life-support if you are not expected to recover from an injury or illness;
- Whether you want to be resuscitated if your breathing or heart stops; or
- Whether you want to receive intravenous fluids and tube feeding if you are unable to eat or drink on your own.
Power of attorney documents allow you to assign the important responsibility of making decisions about your health and finances to a trusted individual.
Protect Your Assets
Without an estate plan, valuable assets could be lost or distributed in a way that you never intended. Careful estate planning strategies can protect assets from creditors and help you save money on taxes.
You may be worried about whether or not the assets you leave to your heirs will be used for their best interests. Estate planning tools can prevent your beneficiaries from squandering any inheritance in the future.
Some individuals at this stage in life have more money invested in an IRA or 401k plan than they have equity in their homes. Planning for the distribution of qualified plans upon the death of the plan participant requires careful consideration of tax and other issues.
Provide for Your Family's Future
Estate planning is essential for making sure that the wealth that you have worked so hard to earn is passed on to your family in the way that you intended. If you have a family business, business planning succession is essential to ensure that there is a smooth transition when it is time for family members to take over the business.
Your peak earning years are the perfect time to create an estate plan to maximize the assets in your estate that your beneficiaries will receive, ensure that essential documents are in place that express your wishes, and help your family members and spouse avoid a future costly legal battle in probate court.
Contact an Experienced Estate Planning Attorney
If you have questions about estate planning during your peak earning years, contact attorney Nina Whitehurst at Cumberland Legacy Law, located in Crossville, Tennessee, by calling (931) 250-8585 or fill out our online form.