Estate planning is not only important in directing the way a person’s money and property is handled after death, but it also provides valuable information to loved ones to help seniors in their final years.
Some people mistakenly believe an estate is something only the wealthy should worry about. An estate, however, applies to all people and the possessions they own. This may include bank accounts, cars, real estate, stocks and bonds, jewelry, or even pets.
Without proper estate planning, all decisions and arrangements for property distribution after death will be made according to state law, not according to someone’s wishes. This could cause chaos and hostility among family members.
Here are seven tips for seniors to get their estate plans in order:
1. Keep personal and financial records in a safe place — Personal information includes everything from your name, date of birth, and Social Security number to employment records and contacts of relatives, close friends, or financial advisers, according to the National Institute on Aging. Financial records include banking and insurance information, liabilities, mortgages, deeds, wills, and trusts.
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2. Let family members or trusted friends know you have records — In case of emergencies or death, people need to know the location of this information. You don’t need to give details on the records, only the location of important papers. A lawyer can help if you don’t have a trusted friend or relative.
3. Prepare a will — A will makes it easier to distribute the property in the estate and avoids these affairs being handled by the courts. You can detail how you want possessions distributed to family members or close friends. A lawyer can help write up a will or you can draw up a simple will online at such sites as LegalZoom.com. Update information on the will when necessary.
4. Consider life insurance — This helps your family meet necessary expenses, such as debts, education costs for children, mortgage and car loans, or annual income needs. A life insurance agent can explain what will work for your particular needs. Term life insurance with a fixed premium during the life of the term is often affordable.
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5. Consider a living trust — The property listed in a trust goes to heirs after death and avoids probate, a court process that may take months or years. A trust is more difficult to challenge in court than a will to help disburse possessions properly. It takes considerable detail from a knowledgeable lawyer.
6. Appoint a power of attorney — Seniors might become incapacitated and unable to make financial decisions. A power-of-attorney document allows a trusted person to handle these affairs, avoiding a court-appointed person to manage finances, according to Caring.com.
7. Make end-of-life and final arrangements — Drawing up a healthcare directive provides your wishes about medical care and prolonged treatment if you’re no longer able to make those decisions. A document for final arrangements details desires for a type of burial, body or organ donations, and whom seniors want to handle these matters.
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