Did you know that nearly half of Americans over 55 have not taken steps to prepare a will?
This is not an easy subject to address or broach with loved ones. However, the year 2020 has taught us how unpredictable the world can be. Even a person with ideal conditions today can suffer a reversal of fortune.
If you have not yet taken steps to plan for your estate, what can you do to make the experience as smooth and efficient as possible? Why not check out our list of estate planning tips? Simply read on to find out more.
1. Communicate as a Family
While we often think of estate planning as a priority for seniors, 2020 has shown that everyone should make a plan. Communicating as families regarding their preferences regarding their assets will make it easier to broach the subject with older family members.
Each family member can consider what their healthcare preferences are. Further, they should consider how their possessions should be distributed if a disaster should strike.
2. Advance Health Care Directive
Making decisions about possible future care is a crucial part of planning for the future. A health care power of attorney will legally guarantee that your wishes will be adhered to even if you are not conscious or able to state your own preference.
There are similar forms called a Living Will or Advanced Directive. You should discuss the differences with an attorney.
3. The Will
Your last will and testament is probably the most well-known portion of your estate and future financial planning program. While a person may think that a simple note or even a verbal contract will be sufficient, this is often not the case.
Some states provide a statutory form to prevent disputes. In other locations, the state will provide recommendations regarding the information that a will should contain.
4. Executor of Your Will
In the event of a death, a person will need to ensure that assets are distributed according to the deceased one’s wishes. The person who carries this responsibility is the Personal Representative of the will.
If a person creates a clear unambiguous will, the distribution will likely be quick and efficient.
5. Granting Power of Attorney
A person planning their estate should also consider who can act as a Durable Power of Attorney. This person will have the authority to make decisions regarding the person’s assets and finances.
What is the difference between a power of attorney and the personal representative of the will? The power of attorney assumes this responsibility before the person passes away. The personal representative is only granted responsibilities in accord with the written will after the person has died.
6. Retirement Accounts
A person will have worked all their lives to build up savings and perhaps even significant retirement accounts. These accounts will likely have beneficiary designations and after-death distribution will be controlled by the financial institution holding the account.
For this reason, it is good to ensure that you get legal advice from a professional that has experience on a range of topics, including taxation.
7. Bank Accounts
While it is relatively easy to distribute physical assets after a person’s death, non-tangible assets can create more of a challenge. These include personal bank accounts. How can a person plan to share these aspects of their estate?
A person can assign a payable on death beneficiary of their bank account. This means that the account will automatically be transferred to the beneficiary upon proof of the bank account owner’s death.
Some have tried to accomplish this by setting up a joint account with the beneficiary. This person may be someone other than their spouse. However, this can create problems as the person has access to the joint account from its creation rather than after the person’s death.
Also, the beneficiary has equal rights to the account. This means that if you choose to change the beneficiary and they are a joint account holder, you will have to get their permission to do so.
A payable on death arrangement with your bank is a far more preferable arrangement.
8. Do You Have Digital Assets?
Many people are not aware of their need to make arrangements for their digital assets. Do you know what digital assets are? These include anything from email and social media accounts to memberships and other obligations a person may have.
While security is a priority and widely sharing your user names and passwords is never a good idea, it would be good to create a way for a person to care for these in the future.
The Most Effective Estate Planning Tips and Much More
While we never want to think about difficult future times, 2020 has taught us that the scene of the world can change very quickly. We all have a responsibility to manage our estate so that it will benefit the people we love the most.
By applying the estate planning tips that we have discussed today, we can do this effectively and efficiently.
If you would like to benefit om professional help when planning your estate, then we are here to help. We leverage our experience in this field and provide our readership with reliable guidance and services. Why not contact us for more information.
