Pamela* concedes that she is in the second half of her life. She and her husband have talked about creating a will, but never followed through to write one. A recent health scare helped Pamela realize that she and her husband need to take their estate plan seriously.
No one likes to think about why they might need an Estate Plan, but having one is very important to ensuring that your plans for your possessions are carried out after you pass away or become unable to make your wishes known.
The National Council on Aging (NCOA) informs us that estate planning isn’t just for wealthy people, but for anyone who wants to have their assets distributed in an exact manner and help address debt so their family doesn’t need to.
Benefits of an Estate Plan
With a solid estate plan in place, you can rest easy knowing that you’ve planned for your and your family’s future. According to the NCOA, having an estate plan:
- Minimize estate taxes
- Avoid delays and costs of probate (the legal process of distributing a person’s debts and assets after they pass away)
- Making health benefits in advance
- Lessening stress on family as they mourn your death
Planning Checklist for Your Estate Plan
The following is an overview of the NCOA’s estate planning checklist. Using this will help you identify the steps for creating the plan that is best for you and those you leave behind.
1. Make a Will
Make a will and identify who you wish to act as your executor, your beneficiaries and who you wish to act as guardians if you have under aged children.
Most states accept a holographic will (a hand written one) or a will created with an online form. To be completely sure though, consider consulting an attorney.
2. Establish a Living Trust
A living trust is a legal document that lets you place your money, accounts and property into a trust. You’re able to use and control them while you’re alive, but once you pass away, they go directly to your chosen beneficiaries.
Wills are essential, but living trusts offer additional benefits:
- A trust skips probate which usually takes a year or more
- It can include provision for managing your resources if you become unable to
- A trust offers privacy because trusts are not public records
A living trust is helpful when there are complex family relationships, multiple properties or beneficiaries have special needs.
3. Create Powers of Attorney
Create powers of attorney (POA) authority to act on your behalf if you pass away or become incapacitated.
There are several kinds of power of attorney:
- General power of attorney: your chosen agent pays bills, manages property and banking as well as legal and insurance matters.
- Medical power of attorney: your agent makes health care decisions when you are no longer able to communicate your wishes due to illness or injury
- Durable power of attorney: broader than the general POA and continues if you’re unable to make decisions yourself
4. Prepare Advance Health Care Directives
Prepare your advance health care directive or living will, where you name an individual to make health decisions based on what matters to you in medical decisions. A living will states your preference regarding resuscitation, feeding tubes and life support. It offers clarity to family members in stressful times and makes your wishes known to them.
5. Gather Important Documents
Gather and organize into one place these important documents:
- Birth & marriage certificates
- Property deeds & mortgage documents
- Insurance policies
- Bank and investment statements
- Military records (if any)
Store all documents securely in a safe location and make sure your executor knows where to find them.
6. Review & Update Beneficiaries
Make sure that they are listed on all financial accounts. These designations can override your will, so it is important to make sure they match.
7. Make a List of Assets & Debts
- Tangible assets such as real estate, personal belongings and collectibles
- Intangible assets such as checking and savings accounts, investments, life insurance and retirement accounts
- Debts that include mortgages, loans and credit cards
8. Plan for Your Funeral or Memorial Service
Your estate plan should contain instructions for your final arrangements. The more detailed you are regarding your wishes, the better. Consider prepaying for your funeral or memorial services to lessen the burden on your family during an emotional time.
9. Tell Your Family Your Plans
Be sure to tell your family what your plans are. Letting them know about your estate plan may help with confusion later.
10. Review & Update Regularly
Be sure to update your estate plan anytime you have big changes in your life. Even if you don’t have changes, reviewing your plan periodically is a good idea.
Pamela and her husband have decided what they want their wills to say and are making an appointment to talk to a lawyer about having them written and establishing a trust for their property. They realize that next time, instead of just a health scare, their estate plan may be the only thing available to help their family know their wishes.
*Name changed for privacy.
How Care is There can help:
- Assist you as you talk through what you want to include in your will (if you have not written one yet)
- Help you locate a lawyer to write your will and answer a question about creating a trust
- Connect you with a Daily Money Managers to help you organize paperwork and gather information for your estate plan
Next Steps
Contact Care is There today for a free consultation!
Toll Free: 800.434.1633
Charlottesville: 434.326.5323
Culpeper: 540.324.3321
Shenandoah Valley: 540.246.0211
Email: Info@CareisThere.com
Related Articles
- Conduct a Mail and Bill Paying Session
- Helping your loved one gather tax documents for tax returns
- The Ultimate Estate Planning Checklist
- Wills and Trusts – When to Make Them and Review Them
- Durable General Power of Attorney – Naming an Agent
- Prepare Your Advance Health Care Directives and Name a Health Care Agent
- Things to consider when hiring an elder law attorney
- What to Do When a Loved One Dies
- How to Be an Effective Advocate for Your Elderly Loved One