Should I Start Estate Planning Now?

should i start estate planning now
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Estate planning is a key piece of a comprehensive retirement plan.

The coronavirus has taken a toll on our finances, as well as our physical and mental health. As a result, it’s essential to plan appropriately for your health care and financial needs in an estate plan to provide much-needed peace of mind, say Yahoo Finance’s recent article entitled “Estate Planning During a Pandemic – Quit Stalling.” The article lists the critical components of a comprehensive estate plan:

Advance Health Care Directive. This is a written plan that states your wishes if you can’t speak for yourself. Your wishes need to be in writing, and the document should be updated as your health changes. Review your advance health care directive with your doctor and the person you select as your health care proxy to ensure it’s completed correctly.

Health Care Power of Attorney. This legal document lets you name someone who can review your medical records and make decisions about how and where you should be treated. This document would be applicable if you were incapacitated and unable to make medical decisions for yourself.

Living Will. A living will is a type of advanced health care directive that explicitly states your end-of-life decisions if you are terminally ill or permanently unconscious. The living will covers specific medical treatments, like CPR, ventilation, pain management, tube feeding, and organ and tissue donation.

Financial Power of Attorney. This document lets you name someone to help with your finances if you become incapacitated and unable to do so. You can state how much control your power of attorney will have, like accessing accounts, selling stock, and managing real estate.

Trusts. Ask an experienced estate planning attorney about creating a trust to protect your assets as you pass them down to your heirs. If your children or grandchildren aren’t old enough or mature enough to handle their inheritance, you can set up a trust that provides them with a small amount of money each year, increasing that amount as they get older. You can also direct that the funds be used explicitly for an adult child’s mortgage or student loans.

Beneficiaries. Many people forget to update their life insurance policies, bank, brokerage accounts, and retirement plans. These all have beneficiary forms, which supersede a will. These should be updated, along with your estate plan, every few years and after every significant life change. That’s something like a marriage, divorce, death, adoption, or birth.

Ensure that you are reviewing and updating your estate plan when you check your retirement plan each year.

Reference: Yahoo Finance (Oct. 31, 2021) “Estate Planning During a Pandemic – Quit Stalling”