One of the biggest errors baby boomers tend to make is failing to complete their estate plans because they either think the plans are unnecessary or they simply put them off. Failing to complete estate plans can leave families dealing with protracted court processes and dwindling assets due to higher taxes. It is thus important for baby boomers to have not only retirement plans in place, but also estate plans.
One of the problems leading people to fail to think about their estate plans is that baby boomers are normally concentrating on whether they will have sufficient money available to retire and are not thinking about death. Good estate plans are important to help prevent losing assets due to common needs later on, such as accumulating long-term care expenses. People should also consider how they would protect their assets in the event a second marriage fails. Creating prenuptial or postnuptial agreements may be an important step to take.
People should also consider having a health care proxy and a power of attorney in place so their day-to-day affairs can be managed in the event they become incapacitated. A health care proxy may be instructed to act according to the provision of a person’s living will regarding health care decisions and end-of-life care. Wills and trusts may be set up to ensure that the person’s assets will pass to intended beneficiaries instead of according to the state’s intestacy laws.
People may want to meet with a wills and estate planning attorney for advice. Baby boomers may also want to seek help from a financial adviser in addition to an attorney to make certain their financial and estate plans are complete. An attorney might help by drafting all needed documents so assets can be protected and passed as desired.
Source: USA Today, “Big retirement mistake: Boomers with no estate plan,” Rodney Brooks, April 8, 2015
