4 Things Retirees Should Know About Estate Planning

You have planned for retirement, prepared for covering healthcare, and researched living expenses. Hopefully, you have also created a will. But one thing that many retirees don’t realize is that even with a will, their death can create financial and emotional complications. For this reason, it is vital for retirees to look into estate planning.

Like most people, you may not have given estate planning much thought until your retirement rolled around. When you retire, it makes you think about your future, your assets, and your death. While it may be a big task, you should start your estate planning today by learning these four facts.

Plan for Probate Costs

All retired individuals should make sure they have money saved or individuals prepared to cover probate costs. After your passing, your will is going to be executed by the specific person you named. When this happens, it’s called the probate process. 

The amount of time it will take for the probate process and the fees charged will highly depend on the state you’re in. In most states, you can expect probate fees to cost around 10 percent of your estate’s value. If you are not already prepared for this, it can cause financial strain on your loved ones.

Financial Beneficiaries

Probate is complicated, and many people find it useful to avoid it altogether. As you’ve discovered above, probate can be a lengthy and expensive process. You can help to avoid probate with financial beneficiaries. 

To do this, you’ll have the financial institutions that are holding your specific financial assets include a beneficiary. This way, they can hand over the asset or funds to your beneficiary upon your death. This is a well-known loophole of probate in the estate planning process that you should be taking advantage of.

Consider Living Trusts

While financial beneficiaries can be named for assets like brokerage accounts, savings, and checking accounts, they don’t work for all types of assets. For larger physical assets such as your car or home, you’ll need to set a living trust. 

This type of trust can also be referred to as a revocable trust. The living trust allows you to state beneficiaries, called trustees, that can retain control of the asset in the event of your death.

Know About POAs

One document that is often discussed during the estate planning process is the power of attorney, or POA. This document comes in two forms, which include financial and medical. In a financial POA, you’re giving the right to give control of your assets to a specific person in the event you become physically or mentally unable to do so. 

With a medical POA, you’re specifying a person who will have control over your medical preferences in the event you become physically incapacitated.

Estate planning is something that everyone should consider doing. Retirement may be the perfect time to sit down and take your individual wishes and assets into consideration. Hopefully, you now have a better idea of how estate planning works and are more confident about contacting your lawyer to discuss starting your own planning.

Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information, contact Brooke via Facebook at facebook.com/brooke.chaplan or Twitter @BrookeChaplan

Know and Understand Essential Probate Financial Planning

Following your death, you want to be absolutely sure that your loved ones are taken care of and your assets are quickly passed to your beneficiaries. Here is a closer look at some of the key aspects of estate planning and a few steps that you can take to make this process as smooth and stress-free as possible.

Wills

One of the easiest and most effective ways to protect your family and assets after you pass away is establishing a will. A will is nothing more than a legal document that describes what you would like to do with your assets after you pass away. That document can also be used to name your executor and who is going to be the guardian of your children if they are still minors.

Living Trusts

The primary purpose of a living trust is to quickly transfer a deceased party’s assets without going through probate. When the state doesn’t know where the assets are going to go, they are placed in probate, and that process can take years. 



Probate will become even more complicated if one or more parties claim that they are the rightful beneficiaries. To avoid those issues, you should consider establishing a living trust.

Financial Power of Attorney

If you ever become incapacitated, then the individual who has been given financial power of attorney will be able to manage your finances. That type of legal document is going to be incredibly important if you are severely injured and don’t have the ability to pay bills, invest, transfer your assets, or collect retirement benefits. When an individual doesn’t establish power of attorney, all of those important financial transactions are going to be nearly impossible.

Medical Power of Attorney

The medical power of attorney document is very similar to the financial power of attorney document, but the individual can make medical decisions instead of financial decisions. In many cases, these two documents are signed by the same spouse, sibling, or parent. After the paperwork has been signed, that party will be able to make a wide variety of medical decisions if you are ever in an accident or suffering from a serious disease.

Once you have finished your estate plan, you should review and update it at least once every year or two. You must also take a fresh look at all of that paperwork whenever you buy property, sell property, switch jobs, or alter your marriage status.