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Estate Planning For Seniors

July 12, 2021

Whether or not you consider yourself a "planner," estate planning for seniors is a must. This collection of legal documents gives you the final say in how financial and medical decisions should be made in the event you are unable to do so. Your estate plan also provides specific instructions about how your assets should be managed after your death and spells out guardianship for minor children. In addition, a comprehensive estate plan can help minimize taxes and probate fees that could occur after your death.

an elderly man writing with a pen, and a smiling elderly woman next to him

By taking time now to understand the details of estate plan strategy and how to put one into action, you'll gain peace of mind and help safeguard your loved ones.  

What is an Estate?

If you think an estate means a castle in Europe, or a large stock portfolio, think again. The legal definition of your estate is all the property you own (like cars, a home, jewelry and other possessions) plus bank accounts, investments and insurance policies. If you have any assets, you have an estate. 

What’s the difference between a will and estate planning?  

A will provides direction about disbursement of assets after your death and directions about who would be a guardian of your minor children. Your will is part of an estate plan, which is a comprehensive plan that provides direction about things that are not covered by a will. 

What is Estate Planning & Why Does it Matter? 

Estate planning is important because it benefits both you and your heirs. Your estate plan should include details about how your assets should be distributed among your family and who should be named a guardian of your minor children. You'll also want to indicate your wishes for medical treatment and finances should you become incapacitated and unable to make those decisions yourself.

If you own a business, your estate plan should also include instructions about who should take over and run the business in your place. In addition, you may also want to add a charitable trust to support your philanthropic wishes and or a living trust in place of a will to more easily transfer assets to loved ones.  

The most common components in an estate plan include: 

Living Will

Also called an advanced directive, this document outlines your wishes for end-of-life medical care should you be unable to communicate those wishes. An attorney or hospital can provide you with a living will form, don't rely on the internet for this. State laws about living wills change frequently. Once you complete your living will, have it notarized. 

Financial Power of Attorney 

This document directs a person of your choosing to make financial decisions on your behalf if you are unable to do so. You can access your state's financial power of attorney form online. However, some banks, title insurance companies and closing agents have unique forms they require for financial power of attorney, so it is not unusual to have several of these documents in your estate plan. All financial powers of attorney forms must be notarized. 

Healthcare Power of Attorney 

This document directs a person of your choosing to make medical care decisions on your behalf if you cannot. You can access your state's healthcare power of attorney form online. Most states require this form to be notarized. 

Living Trust 

This document, which you can change at any time, sets aside assets not in your will for people or organizations. You can find living trust forms online, but each state has particular rules regarding this document. It may be best to consult an attorney, particularly if you have questions or your trust seems complex. 

Letter of Intent 

This document, written by you, is addressed to the executor of your estate and or your loved ones. In it, you can detail your wishes for your funeral, reasons for why you divided your assets the way you did, and any personal or emotional messages you wish your heirs to receive. 

Last Will and Testament

This document indicates disbursement of assets after your death and names others to be guardians for your minor children. A will must be probated – reviewed by an authorized court administrator before assets can be released. You can access a will document online or use specialized software to create your will. If you choose either, research to understand the laws in your state and which services have good consumer ratings. Otherwise, consult an attorney.

When Should I Start To Plan For My Estate? 

There is no time like the present to start an estate plan. While it's best to start estate planning as you begin to acquire assets and start a family, most people wait much longer than that.

When creating your estate plan, understand that it is an ongoing process. You should update your estate plan at life milestones such as each property ownership, marriage or divorce, birth of children or grandchildren, or inheritance of additional assets.

Have you neglected to establish an estate plan? You are not alone. According to Merrill, a Bank of America company, fewer than 20% of Americans have taken this important step. 

Steps & Strategies for Estate Planning 

To begin your estate planning process, take an organized approach to get it accomplished. This estate planning checklist for seniors will get you started with seven specific steps and strategies: 

Make an Asset Inventor

Most people don't know the actual size of their estate. First, you want to list all your assets and their value. Start with your tangible assets like your home, vehicles, collectibles, jewelry and other possessions. Next, list the intangible assets, such as bank accounts, investments, insurance policies, retirement plans and business ownership. 

Determine Your Family's Needs 

Speak to those you intend to be guardians of your minor children and ensure they are willing to serve in this capacity. Complete a will and have it notarized so these guardians are legally appointed and important assets are distributed to ensure your family is cared for after your death. Weigh the value of setting up a living trust for your family to avoid the often lengthy court process of having your will probated.  

Establish Your Directives

Create your living will and determine who should be named as your healthcare and financial powers of attorney. Complete the correct forms for your state and have them notarized. 

Review Beneficiaries 

Check the beneficiaries on all your documents, including insurance policies, investment accounts and your will. Be sure they accurately reflect who should receive these assets after your death. Make changes as necessary. 

Write Your Letter of Intent 

There are many personal and emotional aspects of tidying up your estate that are not covered in legal documents like a will or powers of attorney. A letter of intent helps you take care of those items, such as details about your funeral, who should receive items of sentimental value and the names and contact information of people who should be notified about your death. Your letter of intent can be a true comfort to your loved ones.  

Store Your Documents Safely 

Once all your documents are organized and in order, make a second copy. Place the originals in a fireproof safe or box. Your attorney should have a copy of your will and your named agents should have copies of your financial power of attorney and healthcare power of attorney. Your named agent for your healthcare power of attorney should also receive a copy of your living will. 

Make a Reassessment Plan 

Set a schedule to review your estate plan at least every five years or at milestones like a birth, death, marriage or divorce. 

Putting an Estate Plan Into Action

Once your estate plan is in place, you need to talk to the relevant parties affected by it. Be sure your healthcare and financial powers of attorney agents have copies of the powers of attorney documents and understand your wishes. Likewise, make sure your executor has a copy of your will. Then choose a time that is not associated with holidays or other events to speak to your family about your estate plan.

When setting up a family meeting to explain your estate plan, ensure that every family member involved in your estate is present to hear you outline your intentions within your plan. Explain the purpose behind your decisions, where the documents are located and who are your powers of attorney and healthcare agents.

Making an estate plan takes work and emotional energy, but the peace of mind it can bring is well worth the effort. Are you moving to an Embark independent living community soon? As you plan for that new adventure, now would be the perfect time to also start the estate planning process.

Our content is not intended to provide legal, investment or financial advice. For specific advice about your unique circumstances, consider talking with a qualified professional. 

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