Estate Planning: Don’t Neglect This Important Piece of Your Retirement Plan
According to a recent article in USA Today, most Baby Boomers are neglecting a very important aspect of retirement planning: setting up an estate plan.
While it may not be the most comfortable thing to talk about, having a good estate plan in place is an important piece of your financial plan that can save your family a lot of headaches, stress, and financial issues after you pass on. It’s an easy thing to keep putting off, but you are doing your family a disservice by doing so.
Estate planning should address the three major areas of property and financial assets, children, and medical decisions, and you should keep the following 6 things in mind when planning your estate:
1. Have both a financial planner and an estate-planning lawyer look over all important financial documents to make sure you’re protected from liabilities, and covered for any special issues like long-term care.
2. Protect yourself and your family by setting up a health care proxy, a living will, and medical power of attorney. This will help you to make sure that your wishes are followed in the event that you are unable to make medical decisions for yourself, and give your family peace of mind that they know what you want.
3. Discuss your wishes for your estate with your family. It may not be easy to talk about, but if you don’t make these decisions ahead of time, the government will do it for you – and your family may not be very happy about the outcome!
4. Learn what the estate laws are in your state, and how you can plan for things to happen the way you would like when you are gone.
5. Update your beneficiaries. Remember that your will does not dictate everything. Life insurance and some retirement plan assets are determined by the stated beneficiary – not by the will. Make sure to keep your beneficiaries up to date and check them periodically.
6. Consider taxes. While you may not have to worry about estate tax unless you have a very high income and large estate, you should keep in mind the impact of income tax on the assets and other items you intend to pass on.
Make sure when you sit down with a financial planner to discuss your retirement planning needs that you also address your estate plan. It’s a very important part of a solid retirement plan, and one that is all-too-often neglected. By properly planning for the disposition of your estate in advance, you can give both yourself and your family the peace of mind of knowing that your wishes are being followed after you’re gone.