Despite our best intentions or hopes, the time eventually comes when you are no longer in control of your money. You can’t take it with you but you can have some impact on what happens when you are not the one making the decisions. Most adults, as they age, lose some cognitive capacity and the time to plan for this is in the earlier years of retirement. Leaving your estate in disarray causes family fights and heartache not to mention the time and work involved in cleaning up the financial mess. The best gift you can leave your loved ones is an estate that is well planned for and organized.
What do I want as my legacy?
Will I leave the world a better place? Have I provided for my children and grandchildren? Was my life worth living? Retirement years are a time for reflection: reflection about the past, what was accomplished and left undone, who was influenced and loved, what was learned and lost. Yet retirement is also the time for accomplishment. There is time to do those things that did not get done in the past. Contemplating your legacy and deciding what is most important to you gives you time to make it happen. Whether writing your memoirs, creating an archive of family photos, or building relationships, just do it.
Are my beneficiaries up to date?
Beneficiaries are usually set when an IRA or Annuity is created but life happens. Marriage, divorce and the birth of a child require a change in beneficiaries. A typical disaster occurs when the ex-wife gets the proceeds of a life insurance policy leaving the current wife and kids with no support. Failing to update your beneficiaries will affect how your estate is divided and whether or not your wishes are fulfilled. Changing them is not difficult and usually involves completing a form from the insurance company or company where your assets are held. Don’t delay is updating this important aspect of your estate plan.
What documents should my estate plan contain?
Most do not need complicated trusts because your estates are not large enough to warrant the expenditure. Of course the estate tax code can change so being aware of any changes is important.
What all estate plans should contain are the following:
- A will or trust
- A living will or Advanced Medical Directive
- Durable Power of Attorney
- Guardianship designations
- Beneficiary designations
- Instructions for funeral services and burial
- List of all important documents including deeds, life insurance policies, annuities, vehicle titles
- Lists of accounts and passwords
Above all, make sure these items are readily available and that one of your beneficiaries or your designated financial professional knows where to find them.
Are my Advanced Medical Directives and Living Wills complete? Or more importantly do my loved ones know where to find them?
Living wills are not as detailed and comprehensive as advanced directives which provide for more options in describing your wishes in determining what procedures you want under various circumstances. Most states have guidelines for creating an advanced directive. Whatever you choose to complete, the biggest mistake most make is to put these important documents in a safe deposit box which is almost impossible for a caretaker or beneficiary to access. Make a point to let someone know where your documents are located which should be in a place easily accessible.
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