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Estate and financial decisions to make in your 40s

A surprising number of people in California and throughout the country give little thought to long-term financial planning. Young adults may be more concerned with wealth building than wills, trusts and estate administration.

Older adults can be too preoccupied with a career track and parenthood to give serious thought to the possibilities of accidents, illnesses or death. While estate planning is not the most pleasant of tasks, it can provide satisfaction and comfort. When properly portioned assets are waiting for beneficiaries, the giver and heirs are relieved of future stress, lengthy probate and family conflicts over estate uncertainty.

By the time adults reach age 40, there are several financial moves that professionals say can benefit tax situations and family members.

Many adults in their 40s have growing children and have already considered or established college savings accounts like a 529 plan. Parents may think of the educational savings plan simply as a way to lessen their burden or their children's responsibility for the costs of a higher education. The plans can also provide substantial tax savings and can be used to fund the education of any beneficiary, including a second-career education for a parent.

Financial considerations during the prime of life may also include the needs of aging parents. Elderly parents may have enough to get by during a healthy retirement but could fall short financially if long-term medical care is required. Adult children can ease the strain by investing in medical insurance for parents that would take care of nursing home costs.

The lack of a will gives permission to a probate judge to decide where your assets end up when you die. Even individuals without children might not be satisfied to know a stranger is distributing the assets they've worked hard to earn.

Financial and legal professionals discourage procrastination for estate planning. Drawing up a will can help avoid forcing family members into lengthy probate.

Source: businessinsider.com, "Five Smart Financial Moves 40-Somethings Should Do Every Day," Allison Kade, Jan. 8, 2013

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