Your Guide to Estate Planning for Seniors
If you are approaching retirement age, you should explore estate planning options to ensure your wishes are carried out. One of my readers recently asked me about estate planning after I wrote about caring for my father. My husband and I have already done our estate planning, but I thought I should write about this again for those who still haven’t done estate planning.
If you’re at the age where you’re beginning to plan for your retirement, you should probably start taking steps to secure your estate. The process of getting all of your legal documents in order—wills, life insurance policies, etc.—is called estate planning. Estate planning will help your surviving loved ones fulfill your wishes after you’re gone. Though no one wants to imagine what happens after our time on earth is complete, it is essential to leave detailed instructions just in case.
Today we’ll be exploring how you can get started planning your estate. Then, we’ll go over all the different individual estate planning steps you need to take to ensure your loved ones know how to proceed after your passing. Let’s get started!
What is Estate Planning, and Is It Necessary?
Your estate plan is a set of documents that set forth a clear plan for your family’s future.
Everyone can use some help planning for their family’s future.
There are a lot of misconceptions out there about estate planning. The most prevalent misconception is that estate planning is only for the wealthy. This is not the case—everyone should consider estate planning as they approach retirement age. Your estate plan is a roadmap for your loved ones to follow after your passing; it doesn’t have anything to do with the value of your assets.
What Do I Need to Start an Estate Plan?
Gathering all your relevant documentation, like your will and any life insurance policies is crucial.
Your will and any life insurance policies are good documents to have on hand.
The documents you need for most estate plans include your will, life insurance policies, bank accounts, businesses, savings, and debt. If you find yourself without a life insurance policy, there are lots of ways that you can get affordable life insurance to make sure your dependents are taken care of. It is never too late to take out a life insurance plan, and many companies offer cheap life insurance policies for older people. In addition to securing cheap life insurance, it is also essential to establish a will. Writing a will may sound like a daunting task, but it is much easier than many imagine. There are online services available that make writing as easy as filling out a short questionnaire. Often, these will be writing services are available at little to no cost to you. So, if you are searching for cheap life insurance as an older person and still need a will, it is highly recommended you get those tasks taken care of before you reach retirement age. Once you have your insurance and a will established, you can move to the next steps for estate planning.
What Are the Major Steps You Need to Take When Planning an Estate?
When it comes to planning your estate, there are a few essential steps you need to take to prepare your family for the future.
When you meet with your attorney, there are a few things you need to address.
Estate planning can seem complicated, but giving your surviving loved ones a clear roadmap after your passing is ultimately worth it. The goal of your estate plan should be to designate an executor, establish a living will in the case of a medical emergency, designate power of attorney, create a trust, and organize your estate. In the following sections, we’ll be going over all the steps you need to take to get your estate in order. Let’s take a look!
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Make Sure an Executor is Appointed
The first step is to get your will and trust in order to establish an executor after starting your will. An executor is a person you put in charge of handling your estate. When you pass away, all of the documents you planned for your estate are transferred to your executor. Your executor should be someone that you trust wholeheartedly to handle your affairs after your death. In many cases, people choose their most financially responsible child or the most financially responsible person in their life. Appointing an executor is a big decision—and a big responsibility for the person you choose. So, before you appoint an executor, have a conversation with them first.
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Draft A Living Will
In the event that a medical emergency leaves you unable to make health-related decisions, having a living will is crucial. The person you designate to execute your living will is in charge of making important health decisions should you become incapacitated. When you are writing a living will, it is advised you get an attorney’s help to ensure all of your intentions are clearly communicated. Your living will should cover the following:
- Approved medications
- Palliative care
- Approved medical devices, like a feeding tube
- Qualifications and procedures for life support
- Establish a do not resuscitate (DNR) order
- Organ donation
That way, if you become unable to make decisions for yourself, your living will is there to help your loved ones care for you according to your wishes.
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Power of Attorney
When discussing power of attorney, it is important to clarify a few distinctions. First, the person who executes the living will is considered a power of attorney for personal & health-related issues. This section discusses financial power of attorney only. The person you designate financial power of attorney is able to deal with financial manners if you are incapacitated. For example, if you are moved into a care facility indefinitely, your financial power of attorney will be able to sell your home. You must designate a financial power of attorney so that your assets are properly handled if you cannot provide input.
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Establish a Trust
The next step in planning your estate is to establish a trust. A trust is a financial contract designed to protect your assets from any legal exposure. In layperson’s terms, a trust keeps your finances safe for your loved ones. When you establish a trust, the trust is now an immovable part of your estate. This means that your trust is protected no matter what—even in cases of taxation or probate. For a lot of people, the opportunity to protect your family financially and avoid worrying about inheritance tax is enough to establish a trust.
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Begin Organizing Your Estate
Once you’ve appointed the person/people who will be making decisions after you’re gone, it’s time to organize your estate documents. If you have a lot of different assets or feel that you are out of your depth in setting forth a plan for after your passing, we highly recommend hiring an attorney for help. They’ll be able to help you with every step of the process and make sure your wishes are clearly communicated to your executor.
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Open a Dialogue With Your Loved Ones
Often end-of-life proceedings are full of familial contention. It is important to open a dialogue to avoid this and make the process as stress-free as possible for your family. We recommend taking time to speak with each family member who will be affected by your estate plan individually so they know what to expect. While these conversations can be difficult and emotional, they are necessary to make sure that your estate can be handed off without any issues.
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Provide Directions for Funeral Expenses
One of the major things that your estate can pay for is your funeral. Since funerals are so costly, it is recommended that you leave clear instructions that the estate will provide all of the necessary funds for your funeral. In some cases, you can get a discount on funeral services if you take steps to plan & pay for the event while you’re alive. A bit macabre, we know! But, making sure that your funeral plans are taken care of while you’re alive can be a big help to your family in the future.
Estate planning is never the easiest subject to approach, but it is absolutely essential that you leave a plan behind for your loved ones. If you aren’t sure where to start or how to organize your assets, we recommend hiring an attorney to help you get started. If you are approaching retirement age, now is the time to get your estate in order. Trust us, once your planning is complete, you’ll have far greater peace of mind about your family’s future.
