Many Baby Boomers are neglecting a key part of
their retirement plans — creating an estate plan. And while death is not a
pleasant thing to think about, death without an estate plan can create havoc
for your surviving family members, financial planners warn. Some important
things to remember when you sit down to get that estate plan done:
1. Ann-Margaret Carrozza, Manhattan estate planning and
elderly care attorney, says she advises clients to have two sets of eyes on
every major financial document — a financial planner and an estate-planning
lawyer. The estate-planning focus will help protect the safety of your
financial plan. They will also guard against losing your investments to
liabilities specific to the over-50 population, such as long-term care
expenses. We also need to look at estate planning to guard against losing
assets in the event a second marriage doesn't work out
2. Make sure you have a health care proxy, living will and
power of attorney. The possibility of getting sick is something everyone should
be planning for. I would think when people do serious retirement planning, they
think about health care. They should think about having a document in place to
help people make decisions.
3. As uncomfortable as it may be, have the discussion with
your family, says Carol Kroch, managing director at Wilmington Trust. One may
have a family business, and one child works in the business and not the other.
How about a vacation home that's close to one of your children and not the
other? says Kroch. Those things slow people down. I can't tell people which
child should take their vacation house. I can tell them if they don't think it
through, it could leave a bunch of unhappy people.
4. Familiarize yourself with the laws in your state. How
things convey in the event of death may differ and may not be the way you
intended.
5. Make sure beneficiaries are updated. Who's going to get
the assets when you die? A will is only one piece of it. You are looking at
retirement plan beneficiaries and your life insurance. They will not pass
pursuant to the will. They will pass based on your beneficiary designation.
Make sure they are up to date. Many times they are not. People haven't checked
in 20 years, and it's not in line with your wishes.
6. Consider taxes. Only the highest-income people need
estate planning for avoiding estate taxes. But at the next level down you
should be trying to arrange your affairs, ownership of assets and estate
planning to avoid income tax.
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