Many Minnesota residents approaching retirement have taken great strides in developing a retirement plan. Often, however, they have not taken care to plan their estate to avoid many estate mistakes. According to USA Today, their failure to establish an estate plan could hurt them and their families in the end.
In other words, planning for the flow of money in their golden years and making sure life’s expenses are manageable in those years is on their minds, but not what happens to those remaining financial assets once they die.
There are several areas that should receive attention in terms of planning for an estate if a person wants to avoid creating difficulties for the family after death. They include the following:
- Establish a power of attorney, health care proxy and a living will
- Have a conversation with the family you will leave behind to learn and discuss preferences
- Review and update beneficiaries of assets that do not pass through probate
Create documents providing future authority to others
The POA, proxy and living will combine to solidify a senior’s wishes should the person later become unable to express desires for finances and body. Typically, this would occur via disability or loss of mental faculties.
The POA will allow a trusted family member or friend to act in the stead of the baby boomer to facilitate protection of the assets. The choice for health care proxy and the execution of a living will map out the person’s desires as to what kind of medical treatment to receive under certain circumstance.
Take time to learn of family’s preferences
Speaking frankly with family members can help the decision of what to do with certain assets. For instance, if a family vacation home is in Maine but one adult child lives in California and likely would never use the vacation spot, knowing that fact may help the senior decide to have that home sold by the executor rather than splitting it between the children for their use.
Check the insurance policy beneficiaries of years gone by
Assets such as life insurance policies do not pass via a will. Rather, a beneficiary designation would likely already exist from the time of the purchase of the policy. However, the choice of who is to receive policy proceeds often changes over the course of the years.
A policy left for a minor child may no longer be the choice now that the child is an adult. The policyholder may instead wish to name all children as beneficiaries to share equally in the proceeds or something else altogether.