Getting Your Affairs in Order: What To Do As You Age
Steps to Take to Ensure your Family's Security
Every person ages. There is no avoiding this element of life. However, many people fail to get their affairs in order. They may believe they have plenty of time to do so, only to learn that isn’t the case, or they feel they don’t need to take this step because they have minimal assets. Failing to handle these tasks can lead to complications for those left behind when they pass. What should you do to ensure they don’t encounter problems when you are no longer here?
Create an Inventory of Your Assets
Start with the basics of the home and list them. Include serial numbers of electronics and other expensive items. If you have receipts for these items, store them with this inventory list. Include insurance documents for high-value pieces.
If possible, include a description of each item, the date you purchased the item, and the estimated value. Simplify things for the executor and consider notating which family member or charitable organization should receive the item upon your passing. This step isn’t necessary but will be helpful.
While this list is helpful, the executor needs more information. Include photos or a video of the assets in the end-of-life packet. Store a copy of the documents and the photos or video in a safe place, such as a fireproof safe or safe deposit box. Many people today choose to keep a copy online in the cloud, as well.
Select Beneficiaries
Most people choose one person to whom they will leave all of their assets. The list of assets you can pass on includes life insurance policies and retirement accounts. Don’t make this mistake. Select multiple beneficiaries to ensure the executor distributes the funds as desired.
Primary beneficiaries are first in line to receive the designated assets. Contingent beneficiaries only receive the assets if the primary beneficiaries cannot do so for any reason. However, take care when choosing who should receive the assets.
Avoid naming a minor child as a beneficiary. Doing so could create legal problems. You should establish a trust for any assets that will be left to a minor child. Designate a trustee to oversee the assets on their behalf.
Never name someone receiving government assistance as a beneficiary. They may not qualify for the assistance once they receive the assets. In addition, know how the distribution of assets will affect each beneficiary’s tax situation to avoid creating problems for those who will receive these assets. Every person should request a consultation with an estate planning attorney for help with determining the tax implications of their estate plan.
Prepare End-of-Life Documents
Every person needs a will, even if they own nothing more than the clothes on their back. This document ensures their items will go to the individuals or entities they choose when they pass. In addition, men and women need a living trust and durable power of attorney for their finances.
Advance directives are of significant benefit when a person becomes ill and is no longer capable of making decisions regarding their healthcare. Every person should also consider making a living will. A third document that many people choose to create is a durable power of attorney for healthcare.
Nevertheless, these documents aren’t helpful if the right people cannot find them upon your passing. Keep these documents in one place and let a few people know where they are. These individuals may include your estate planning attorney, the executor of the will, and one or two trusted family members. However, you may also choose other individuals to be informed of this location.
Choose an Executor
Any person can serve as the executor of an estate. However, not every person is prepared to take on this role. Select someone willing to take on this responsibility.
In addition, choose a younger successor, as this document might not be needed for decades. The successor will take on the duties if the person named in the document cannot fulfill them. However, ensure both the executor and the successor are qualified to serve in this role.
Gather Information for Loved Ones
Loved ones need information to handle your affairs. This information goes beyond the end-of-life documents you have prepared. Create a notebook that lists everything they need to know. On the initial pages of the notebook, outline instructions for handling all accounts.
To ensure timely payment of all bills and avoid overlooking any insurance policies, the executor will need a list of all assets and debts. This individual also needs passwords to all digital accounts and directions on where to find financial documents, such as paperwork for college funds. Furthermore, share where they may find all end-of-life documents.
In this notebook, include any details you would like included in the end-of-life celebration. The more the family knows about the wishes, the easier it will be to carry them out. They are grieving your loss and will appreciate having these details to guide them.
Work with an Estate Planner
Many people find they need help to handle the various tasks. They also want to ensure they don’t accidentally overlook anything. Working with an estate planner will ensure that you complete all tasks and meet legal requirements.
The estate planner works to protect any young children and beneficiaries. Don’t let a court decide where the children will live or who gets your assets. However, this is only one of several benefits of working with this professional when planning your estate.
The Internal Revenue Service is ready to take its share of your assets. The estate planner knows ways to keep this tax burden to a minimum. While the planner may not eliminate the taxes, they keep them as low as possible.
Family arguments often occur when a person dies without a will and other estate planning documents. The fight may ultimately lead to family members arguing their case in court. With the attorney’s help, you determine where your assets go, rather than leaving this task to others.
Make an appointment with an estate planning attorney today. While you may have taken these steps previously, it never hurts to review the plan. Any changes in your life could lead to the need for changes in this plan. The attorney’s job is to ensure you protect your loved ones and guarantee they receive the assets you want them to receive. With their help, you can look after your heirs even when you are no longer physically present.
