No one enjoys talking about their own mortality or wants to think about what will happen if their health declines. Likewise, it can be a sensitive and awkward subject to broach, even with the ones we love the most.
But making crucial decisions right now to protect your hard-earned assets can help avoid confusion for your loved ones later. It can also provide peace of mind while you hopefully enjoy many more happy, prosperous and healthy years to come.
Three crucial estate planning decisions to make now
Estate planning is all about protecting yourself and your assets while you are alive and distributing them according to your wishes. The most critical choices are:
Health care decisions: Make sure your family and close friends know how you want to be treated if a health care crisis renders you unable to make decisions for yourself. You can do this by:
- Designating a health care proxy or medical power of attorney to make decisions based on your directions
- Drafting a living will outlining end-of-life treatment or long-term care options
- Determining whether you want to be an organ donor
- Detailing any funeral arrangements you have already made
Name an executor: Select someone you trust, who doesn’t have to be an attorney, to manage your estate and distribute your assets. Make sure they understand the duties the position requires.
Protect your assets: Assign financial power of attorney to someone who can manage your money, debts and assets if you become injured or ill and cannot make those decisions yourself. Also:
- Inform your heirs if most or all of your assets are placed in a trust and what that means for them
- Consider potential tax consequences for beneficiaries
Finalize your will and tie up all loose ends
Working with an experienced estate planning attorney can help you finalize your will and create a “need to know” file with information on finding and accessing financial accounts, insurance policies, retirement plans and all the information necessary to pass along your assets efficiently and according to your wishes.
Thinking about these decisions can be extremely difficult for many. But those who take these steps while they are healthy can avoid unnecessary anxiety and the potential for probate issues, leading to long delays and added costs, lessening the amount of their estate passed on to loved ones.