As you age, it may not always be pleasant or easy to plan for the future, including how your estate will be managed and how your wealth will be transferred after your death. But doing so can help ensure that your loved ones and your assets are well cared for.
Here are some important tips to help you prepare.
Simplify Your Estate Planning Records
Ryan Nast, Regions Investment Solutions Financial Advisor, recommends an initial meeting with a professional to determine the scope of your estate. “I always try to have a conversation with retirees around consolidation of assets,” he says. Seek to consolidate all information regarding your assets as much as possible so you have one statement that lists everything.
Additionally, you may want to consolidate financial services to use a single Financial Advisor or bank. Not only will this probably help you better understand your overall finances, it will also make future estate planning more manageable, particularly with the administration of your estate.
Create a Will
If you don’t have a will as you enter retirement, you should create one with the help of a qualified attorney, Jones says. If you already have one, retirement is a good time to revisit and update it. A complete, well-structured will can help ensure that your desires are fulfilled with respect to how your property is distributed at your death.
In addition, consider a living will (also known as an advance health care directive), which specifies your wishes regarding your health care in case you become mentally and/or physically incapacitated. Having a laid-out plan should you become extremely ill can reduce the stress on loved ones and other caregivers.
Select an Executor for Your Estate
Choose an executor who will be in charge of managing your estate and making sure your wishes are carried out. Depending on applicable state law, your executor can be an adult child, a relative, a friend, or an attorney.
Rather than simply choosing someone based solely on their relationship to you, select an executor who is trustworthy, responsible and organized, because the role requires management of a lot of paperwork and involves deadlines that need to be met. Also consider choosing an executor who is diplomatic and adept at handling conflict, as disputes may arise when administering the estate.
Similarly, in the case of a living will, you’ll need to designate someone who can be your representative and make decisions on your behalf should you become very ill or incapacitated.
Consider consulting a qualified estate attorney regarding both roles and any related paperwork that will need to be drafted and executed in order to properly document decisions that you make regarding these roles.
Discuss Estate Planning With Family Members
Jones suggests having a constant and frank dialogue — for example, once a year or every six months — with your family members, beneficiaries, and executor about your assets, wishes, and any formal planning that you have done.
Discuss key details about your life insurance plans, 401(k) assets, property, and other aspects of your estate in a clear and concise way that everyone understands.
“Your family should understand who the primary contact is [when it comes to your estate and the planning you have done],” Jones says. In most cases, the primary contact will be your executor.
You never have to share the exact contents of your will, but everyone should know where it is stored. Start this discussion as soon as possible, and make updates any time your situation changes.
As a senior citizen, your retirement years should be relaxing and stress-free. What better way to help ensure that than by creating a plan sooner rather than later?
