Seasons of Life—Ages 40s to mid-50s
Posted by Wallace Barkins on June 13, 2018 in categoryFacts & Research

What’s the right age for adults to begin estate planning? In most states, the only legal requirement for a valid will is that a person is 18 or older and “of sound mind.”  As a practical matter, the need for a will and other estate plans starts to arise when a person assumes family responsibilities or accumulates personal wealth sufficient to warrant planning for its distribution. Estate planning needs and goals change over the decades, but there are many ways to incorporate philanthropy into the plans.
People in this age group are often in their peak earning years. Many are finished (or nearly so) writing checks for mortgage payments or for their children’s college tuition. Their attention may turn to maximizing retirement savings.

Among the financial challenges facing people in this age range:

  • Minimizing income tax by taking advantage of deductions, including those for contributions to retirement accounts
  • Providing financial and personal assistance to aging parents
  • Helping their children with down payments on homes
  • Establishing college funds for their grandchildren
  • Keeping estate planning documents current with changing family needs

Because people in this age group can lose 36 cents or more of every dollar they earn, they could certainly use the charitable deduction on their income taxes.  They may also be looking for ways to make more of an impact with their gifts to organizations they support.

Among the charitable techniques attractive to people in this age range:

  • Cash gifts
  • Gifts of appreciated property, which provide deductions equal to the fair market value, not just the price originally paid for the assets
  • A contribution of life insurance that is no longer needed for family security, either as an outright gift of the policy, naming a charity as a beneficiary or contingent beneficiary, or by contributing the policy to charity, thereby generating an income tax deduction
  • A bequest in a will or living trust
  • Naming charity as a beneficiary of an IRA or other retirement plan
  • Deferred payment charitable gift annuities that generate current income tax deductions, provide payments that can start at retirement, and make a significant gift to charity
  • Charitable remainder trusts that generate income tax charitable deductions, avoid some capital gains tax when funded with appreciated securities, provide payments for life or a term of up to 20 years, and leave a gift to charity
  • Charitable gift annuities that can be arranged to make fixed payments for life to parents or grandparents


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