If you are worried about what will happen to your assets once you pass away, senior estate planning is essential. You’ve worked your whole life to build up assets that you can pass on to give your family and loved ones a better life.
You need to make sure these assets are distributed and divided in the way you want them to be. It’s best not to take the risk of this not happening.
In this article, we’re looking at estate planning for seniors. What is it, and what do you need to consider when you are planning for your death? It may not be the most fun thing to think about, but it can certainly give you peace of mind.
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What Is Senior Estate Planning?
Estate planning is preparing tasks to distribute a person’s assets if they pass away or become incapacitated. It is the process of working out the distribution of the assets to heirs, such as family and children.
The estate plan is normally set up by working with an experienced company or attorney. They can assist with estate law to help with the legal aspects and with the taxation.
If you do this yourself, you risk not getting the best “deal” for the future. Taxes can be applied that you can prevent by following certain due processes to ensure your estate planning is as financially efficient as possible.
This isn’t just a case of “who gets what” it is about maximizing the assets you are able to leave behind.
Assets do not just mean the financial value of bank accounts and savings accounts, either. There is a huge amount that may make up the assets of a person.
This can quickly get confusing if you don’t know what you are doing when it comes to estate planning. Assets include houses, cars, stocks and shares, paintings, and valuable belongings.
They can also include savings accounts and pensions. Don’t forget, debt will also need to be considered.
People do all sorts of different things with their assets. It is a matter of personal choice. You may wish to leave to your spouse or loved one, your children, or even to a charity or foundation. It is your money, so you are able to leave it to whoever you wish.
The Senior Estate Planning Must-Haves
What are the steps to take during senior estate planning? Which steps absolutely need to be taken? What is the checklist to ensure that you have taken the right steps in your senior citizen estate planning?
Most of us have heard of a will. This is a legal document that demonstrates how the property a person owns, and their minors should be handled once they have died. In senior citizens, young children are not usually on the scene.
The individual can, through the will, express what they wish to happen. Also, the will shows whether they should create a trust after death, which can go into effect during their lifetime if they want.
Once a person is deceased, a process called probate comes into effect. This is the administration of the estate, and it is the way that the will is authenticated.
The custodian of the will goes through a probate court or the executor, and within 30 days, the will should have passed through probate and the assets distributed.
Probate is supervised by the courts. It is a legal procedure to establish the power of the executor of the will.
Durable Power of Attorney
This is a term you may have heard but may not have fully understood. A durable power of attorney is often abbreviated to DPOA. The DPOA is the person allocated to control the legal and financial matters after the principal of the will becomes incapacitated, or passes away.
DPOAs are put into place as the principal signs off on a document passing on power of attorney for healthcare and financial matters. This is the case of allowing someone you trust to make decisions after you are able, such as decisions on treatments, and then the legal outlook of your finances once you have passed.
This can be a difficult job. The DPOA may have to make tough decisions such as when to turn off life support. This is not a decision the principal will be able to make at this point.
Appointing a DPOA should not be done lightly, this needs to be someone who is trusted. They will be making decisions on finances should they need to be made after you have passed. Often, this is allocated to a family member or trusted friend.
This is separate from the will, even though many people get them confused. A designated beneficiary is the person (or trust, estate, or charity) that is set to receive a payout of the balance of accounts after the death of the owner of these assets. This can be things like retirement accounts or life insurance settlements paid after the will has been settled.
The person who is named as the beneficiary receives the balance if the account holder has passed. When putting together a retirement plan account or life insurance policy, you should name the designated beneficiary in this. You can review it regularly. This can be an area our team can help to ensure the planning has been done properly.