No matter how much workers earn, if they have children or where they are in their journeys to retirement, Americans should take estate planning seriously — if not for themselves, then at least for their loved ones.
Retirement Tip of the Week: Do you have a will? If not, jot down what it is you hope to have done with your belongings when you die, and then think about what else you can do to secure your future. Consider carefully what you’d want done for your health and assets if you were to become incapacitated.
Many adults might not feel they need any estate planning, especially if they haven’t amassed a large nest egg, don’t have any dependents or haven’t made any expensive purchases, such as a house or business. That type of thinking is a mistake.
Estate planning can certainly be meticulous when there are millions of dollars involved, plenty of children and grandchildren to split inheritances or a long list of last wishes to make. But it’s also imperative with a modest lifestyle. “And if they don’t have a complex estate, it is really not as daunting as they may think it is,” said Jurianne Franqui, an estate planning attorney. “Just do it. Get started. Take one step at a time.”
See: Here’s how to help yourself and your family ‘in case you get hit by a bus’
The good news: Americans have taken their last wishes more seriously in the past year. The number of young adults with a will increased 63% since 2020, according to a Caring.com survey. In 2021, Americans between 18 and 34 years old were — for the first time — more likely to have a will than those who are between 35 and 54 years old, the survey found.
Still, even with a pandemic that practically halted the world, the number of people in the U.S. with a will has not “significantly changed,” the survey found. Two-thirds of participants said they didn’t have a will.
Almost three out of 10 people said they didn’t have enough assets to leave anyone, more than 34% said they just hadn’t gotten around to it, a little more than 5% said it was too expensive to set up and almost 8% said they didn’t know where to get one.
Cost might be a deterrent for some people, but working with a professional to create a will might be less expensive than the consequences of lacking an estate plan, Franqui said. “You can either spend it now or your descendents have to spend way more than that,” Franqui said. “Someone pays eventually.”
Here are a few tasks you should do right now:
Write a will
The will is perhaps the most common estate-planning document. It’s what people look for when someone dies, and it could be the key to loved ones fulfilling the decedent’s wishes.
A will serves an incredibly important purpose: it provides guidance for who should act as guardian of minor children, said Indrika Arnold, senior wealth adviser at The Colony Group. “If you have children, you want to have a will; that’s what determines who takes care of them,” she said.
But even if there are no children, a will offers a blueprint as to what assets are available, and where they should go. It could also list some less-expensive but emotionally valuable belongings, such as leaving a child a record collection or donating a piece of art to a local school or museum.
Estate planners and attorneys suggest working with a professional to create the will, as courts may have an issue with handwritten or do-it-yourself documents made with a software program at home. There could be specific language needed for certain wishes that an attorney practicing in the state would be familiar with and look out for when preparing the document. Individuals could also make mistakes or unknowingly omit pertinent information.
Either way, write everything you wish for down. “If you don’t have a will, it doesn’t mean that you don’t have a plan,” Arnold said. “It just means it is not your plan. It is somebody else who is going to decide this for you.”
Read: Should I do an online will? Avoid these pitfalls
Find someone to take control when you can’t
There are two crucial documents a person needs to ensure their affairs are in order when they are not in the position to do it themselves: a durable power of attorney (sounds like it should just be a power of attorney since you get into the options below) and a healthcare proxy.
There are also two main types of powers of attorney: durable and non-durable. Either one will allow another trustworthy person to act on the incapacitated’s behalf to make legal and financial decisions. The difference is in their duration: Durable powers of attorney remain in force from the moment the individual signs the paperwork until death, unless the power is revoked. A non-durable power of attorney is temporary.
There might also be provisions, such as a “springing” power of attorney — those only take effect at a specific event, such as when someone becomes incapacitated.
A health care proxy is similar, in that it lets another individual make decisions for the incapacitated, but is focused on health care directives. This would be helpful in dire scenarios, such as if someone is in a coma or incapable of making their own decisions.
In all of these scenarios, make sure you choose someone you can trust — and make your wishes abundantly clear with that person and in those documents.
Have a question about your own retirement concerns? Check out MarketWatch’s column “Help Me Retire”
Make a balance sheet
List everything you own of value as well as your liabilities (like a mortgage or credit card debt), Arnold said. Then sit down, with your spouse if you have one, and consider what should go to whom and who in your life would be most capable of handling your affairs for you. Ask questions such as: Who is going to be in charge of my estate? Who is going to be in charge of deciding what happens to me or us if we become incapacitated or when we die? Who will care for my children?
“If you have something, even if you’re not 100% comfortable with it, at least it isn’t someone else’s plan,” Arnold said.
Also see: You need to make a will now more than ever
Update your beneficiaries
There are a few assets that do not need to pass through probate, and those are contractual obligations with listed beneficiaries (such as life insurance policies and retirement accounts).
Named beneficiaries take precedence over wills. For example if a worker includes his spouse as the beneficiary for his 401(k) plan and they divorce, that ex-spouse will still get the account assets at his death if a new beneficiary hasn’t been named.
Read: Avoid these 3 estate-planning mistakes and make probate cheaper and easier for your loved ones
Plus: Re-creating a loved one’s financial life is hard — 5 steps to follow after a death in the family
Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column
"later" - Google News
November 02, 2021 at 06:30PM
https://ift.tt/3pVlUIt
A simple checklist to get your wishes met later in life - MarketWatch
"later" - Google News
https://ift.tt/2KR2wq4
Bagikan Berita Ini
0 Response to "A simple checklist to get your wishes met later in life - MarketWatch"
Post a Comment