Five reasons why estate planning in your 30s is important

It may seem macabre but it's prudent financial management

Five reasons why estate planning in your 30s is important

It may seem a little macabre to start thinking about estate planning in your 30s, but it’s actually prudent financial management – and something that everyone should do by then.

Your 30s may bring you many great opportunities, such as better jobs and salary, marriage, or children. You may also be starting a business or starting to think about saving for retirement or beginning to build up a nest egg to achieve some of your life’s dreams, so have assets you could leave behind.

You don’t need to have a lot of money to consider what you’re going to do with your assets if you become ill or die. So, here are five good reasons why you – or your loved ones of that age – should do estate planning to reap the benefits.

  1. You are married: It may be hard to think about losing a spouse, or common-law partner, but having everything financially prepared if you ever have to face that in your life is essential. Without doing that preparation, you’ll not only have to deal with the emotional trauma of losing the person, but also situations that could severely slow the process of transferring assets and stabilizing your future. For instance, if you’re not listed on your partners bank account, you may not be able to access the funds and may need a court to approve you getting access to them. That could cause a lot of hardship if you’re relying on it for mortgage payments or daily expenses. If you, or your partner, dies without leaving a will, either of your property may also not be split the way you’d like – and cause undue financial hardship, too.

  2. You bought a house: Buying your first house is exciting, but determining who will inherit it if you haven’t done any estate planning can be very trickly. If you have a will, your home ownership would be transferred according to what it says. If you don’t have a will, the ownership will be transferred, or split, according to your province’s laws, and those can vary widely across the country. By doing your estate planning in advance, you can determine how your property will be distributed. It will also prevents a lot of emotional turmoil or disputes, so you can leave your loved ones in a solid position in case you die.

  3. You have children:  By your 30s, you may have children – so you need to make a long-term plan for them in case something happens to you. There are many things to consider for that, especially if your children are legally underage, because you want to guarantee that they will receive proper physical, mental, emotional, and financial care if you die.
  • Decide who the best guardian would be for your children if you’re gone. This is particularly critical if you’re a single parent. You’ll need to ask that person’s permission as this is a very big commitment to take on if you’re gone.
  • Talk to a lawyer to determine what documents you need to protect your children, then make sure all the essential documents are in place to ensure that your children receive your assets. Doing that now will help prevent all your assets going to probate, which can be expensive and also hold up the funds for awhile when the children may need them.
  • Keep your children’s medical rpecords, birth certificates, and other vital documents in a secure location, which their guardian should now and be able to access if you die.
  1. You have assets – retirement or investment accounts: By your 30s, you may have already begun to build some assets, beyond your housing. These could include registered retirement savings plans, tax-free savings accounts, or money that you’ve begun to invest. You need to ensure that you protect those funds, too, so you should:
  • Name a beneficiary for each fund you open. You can often assign those to your estate, too, if you have a will, so that they will be disbursed according to the wishes that you spell out in your will. That latter route can save you from having to change the fund beneficiaries each time you have a major life change – such as marrying, separating,  divorcing, or having children – if you keep your will up-to-date.
  • Tell your family where the documents are for these funds and how they can claim the assets. Missing or incomplete forms can delay, or even stop, the redemption process. So, ensure you have everything in good order to help when the time comes.
  1. You started a business: You may have sunk much, or all, of your assets into a business, so need to protect those, too.  From the time you start the business, you should have a contingency plan as to what will happen to it – and your assets – if you become ill or die. That’s important whether the business needs to be wound up or will continue with a successor, whom you also need to groom and bring into the business in enough time to keep it going if you’re gone. Talk to your financial advisor and lawyer about how you can best set those up, but definitely put it on your radar to ensure that your family and employees, as well as business, are properly dealt with if you’re gone.