Now Is The Time To Update Your Estate Planning Documents
Many seniors executed a Will many years ago. While this original document is likely still valid, it is important to update a Will after any major life change. Most people should review their current estate planning documents after getting married or divorced, buying or selling a home, inheriting substantial assets, and other significant life changes. In many cases, seniors have accumulated substantial assets since their last Will was drafted. Many people want specific assets transferred to specific individuals after death. These types of specific gifts were likely not incorporated in an older Will. Additionally, seniors may have decided that the person that they originally named as executor is no longer the best person to oversee the distribution of assets.
If someone wishes to put some control on an inheritance, that person may want to consider a trust. Some people wish to transfer assets to others over time or after the occurrence of some event. For instance, one may want a beneficiary to have a gift only after that beneficiary reaches a certain age, or graduates from college, or completes some other accomplishment. In the past, some people elected to have a trust because a properly funded trust can avoid probate. A trust is only one of the ways to avoid probate. It is important to consider all of your assets to determine the best way to transfer them.
In addition to a Will, seniors should also have a Durable Power of Attorney for Finances. This document allows individuals to designate a representative to make financial decisions for them in the event of their incapacity. This representative may have the authority to do things like manage your utility or credit card bills, redirect your mail, or even run your business. You can grant as much or as little authority to your representative as you would like. Research indicates that most people will lose mental capacity before death. Therefore, it is important to have a Durable Power of Attorney for Finances.
It is also important for seniors to have a Health Care Power of Attorney. This document designates an individual to make medical decisions for you if you do not have the capacity to do so. It is important to distinguish a Health Care power of Attorney from a Living Will. While a Health Care Power of Attorney designates someone to make decisions, a Living Will provides your wishes about care at the end of your life. It is important to have both documents to ensure that your wishes are carried out.