With retirement right around the corner, you are probably looking forward to spending your days golfing in Melbourne or enjoying afternoons on your boat. While you might be counting down the hours before the next phase of your life begins, are you really ready for it? Have you taken the time to update your estate plan or even started the process of creating one yet? If not, it is past time to get started.
While every estate plan is unique, there are some common documents you should consider including in yours. In addition to a will, here are a few must-haves that you should add to your estate plan.
Durable power of attorney
An estate plan does not go into effect until you die. It can be very useful if something happens to you that leaves you incapacitated, though. For instance, a disease or accident might leave you in a state where you can no longer make rational decisions. If you have a durable power of attorney that appoints an individual you trust to act on your behalf, then he or she can manage your assets.
If you die without a will, the court will more than likely distribute your estate to your heirs. However, what if you don't want your heirs to receive 100% of your assets? Perhaps you want part of your estate to pass to a charitable organization. A basic will can specify how you want your assets divided at the time of your death.
However, there are certain assets that can pass to beneficiaries outside of the will. For instance, many life insurance plans and retirement accounts require that you name primary and secondary beneficiaries. These are the people or organizations that will receive the proceeds from the accounts when you pass.
Letter of intent
If you have an extensive estate that includes real estate and other complex and high-value assets, you might want to draft a letter of intent that includes instructions about what you wish done with a particular asset when you die. For example, perhaps there is a family heirloom that has been passed down through various generations. The letter of intent can specify whom you wish to receive that heirloom.
If you haven't begun the estate planning process yet, there is no time like the present. When you are drafting the documents for your plan, do not forget to include the items listed above.