As summer draws to a close and the school year begins, many parents are experiencing a significant life transition—becoming empty nesters. Whether your youngest has just started college or your last child has finally flown the coop, this new chapter of life brings both emotional and practical changes. One important, yet often overlooked, aspect of this transition is the need to update your estate plan.
This time of change can bring about new considerations, particularly around who you want to manage your affairs if you’re unable to do so, and how and when your children should receive their inheritance. Here’s why now might be the perfect time to revisit your estate planning.
Reconsidering Your Power of Attorney and Healthcare Agents
When your children were younger, you may have chosen a close friend or family member as your power of attorney or healthcare proxy. These individuals were likely selected because of their proximity or ability to manage responsibilities while raising your family.
Now that your children are adults, it might make sense to consider them for these roles. However, choosing the right person is crucial—they should be trustworthy, responsible, and capable of making decisions in your best interest. On the other hand, if you had previously appointed one of your children, you might want to reassess whether they are still the best choice, especially if they’ve moved far away or their circumstances have changed.
Updating your power of attorney and healthcare directives ensures that the individuals handling your affairs are those you trust the most in your current life situation.
Updating Your Trust
With your children now becoming more independent, it may be time to revisit and update your trust. This process may involve revising guardianship arrangements if you still have one or more minor children, updating beneficiary designations, or streamlining your estate plan to better align with your children's current adult status.
Some trust provisions that were essential when your children were minors may no longer be necessary, or they may need adjustments to reflect your children's current ages and life circumstances. You may also want to consider changing your successor Trustee to your child now that they are an adult.
Revising When and How Your Children Receive Their Inheritance
As an empty nester, you might also want to reconsider how and when your children should receive their inheritance. When your children were minors, you may have set up trusts or specific guidelines for inheritance distribution that may or may not still make sense. Now that they are older, these provisions may need updating.
Some factors to consider include:
Age of Inheritance: You might decide that your child is now mature enough to be in control of their inheritance at an earlier age. For example, maybe your trust says that at age 35 your child can serve as Trustee of their continuing trust, but they are 25 now and very responsible. Alternatively, you may want to delay their ability to serve in this capacity until they reach a certain later age or life milestone, like finishing college or getting married.
Lifetime Continuing Trusts: Instead of a lump sum as an outright distribution, you might choose to distribute the inheritance in further trust for better creditor protections for your children from divorce, lawsuits or even bankruptcy, ensuring your child is financially secure over time and less likely to lose their inheritance due to future potential threats.
Specific Bequests or Purposes: You can also tailor the inheritance to provide for specific bequests outside of a continuing trust such as an outright distribution of a certain dollar amount of cash, a classic car or other specific asset. And you can even creating a letter of instruction to the Trustee to be advised of your wishes to help use funds in a child’s continuing trust to buy a first home or start a business, ensuring that the money is used wisely.
These decisions should reflect not only your wishes but also your children’s current circumstances and maturity levels. Consulting with an experienced estate planning attorney can help you make the best choices for your family’s unique situation.
As you navigate these changes, it’s crucial to seek professional guidance. A qualified estate planning attorney can help you understand your options, make informed decisions, and ensure your estate plan is up to date with your current life circumstances. Whether it’s revising beneficiary designations or selecting new successor Trustees, powers of attorney or health care agents, professional advice can provide peace of mind.
If you, a friend, or family member need help establishing or updating an estate plan or with trust administration, please reach out to our Intake Department at 760-448-2220 or at https://www.geigerlawoffice.com/contact.cfm. We have offices in San Diego County (Carlsbad) and Orange County (Laguna Niguel), but we assist can families throughout California as well.
