No one likes thinking about end-of-life situations, but it’s essential to take care of some necessary items to make things easier on your family when you die. It will save a lot of heartache and time on your loved one’s part if you have everything in line.
Have a will in place and update it accordingly
Making a will doesn’t have to be complicated, but many Americans put off writing one for several reasons. Generally, there are rules in place where the deceased belongings will go to in the case of larger assets. This includes items such as bank accounts, retirement accounts, and other life insurance policies.
When it comes to wills, these are your two biggest concerns:
Name a Guardian — If you have children who are under 18 years old, then you must have a will and it needs to name a guardian for them. Without a will, the court will be forced to get involved and name a guardian. This is a very large decision, so it’s one that should be made by you and not the courts.
Find an Executor — An executor is someone who carries out your will. This person will deal with all of your accounts, etc. after your death. Executors pay taxes and debts, will close your accounts, and go about distributing the items in your will. Many people choose a relative, but a financial advisor is not uncommon. An advisor will be familiar with the ins and outs of wills, so there will be less room for error if they handle it.
Property, like furniture, family heirlooms, and inheritance that you want to pass down to your family members will need to be clarified in your will. While many families are able to divide possessions, it reduces guilt, stress, and the possibility of family fighting if you take care of it beforehand.
Appoint a Power of Attorney
A power of attorney is someone who will act on your behalf for legal and financial matters if you become unable to do so yourself. There are different types of power of attorney, including:
- Durable Power of Attorney — This Power of Attorney becomes effective immediately.
- Springing Power of Attorney — Goes into effect after a previously stipulated event, like a medical diagnosis.
- Medical Power of Attorney — A trusted individual who can make decisions about your medical treatment if you are unable to do so. They are unable to make financial decisions.
Power of Attorneys should be someone you trust completely. You must have confidence that they will always act in your best interest, financially and physically.
Create a list of your possessions and determine recipients
Like what you do in a will, make a list of your possessions and determine the recipients you wish to receive them once you pass. These types of possessions are generally less valuable than ones you name in your will. Writing down your items with sentimental value will help your family determine what goes where and prevent any potential fighting.
Speak with a financial advisor
It’s true that the best way to ensure you have taken care of everything you need to before you die is to speak with a financial advisor. They are the experts and will understand how to create wills and trusts, appoint executors, give advice on Power of Attorneys, and more. It’s generally best practice to leave your family out of most of these types of legal matters, as emotions can run especially high during these types of situations. A financial advisor will be able to help from a nonpartisan standpoint.
Originally published at https://www.seniorfinanceadvisor.com.