For many people, estate planning isn’t something they want to think about when they’re healthy. No one enjoys contemplating death. However, that means that many Californians wait until they’re at the end stages of their lives to make wills and other financial preparations.
If that’s the situation for yourself or a loved one, there are some considerations to ensure that your wishes are carried out and your affairs are in order. These can help you minimize unnecessary work and costs for your loved ones.
If you anticipate being incapacitated and unable to make decisions for yourself, it’s essential to designate one or more trusted persons as powers of attorney to handle your financial matters and your health care decisions. You can provide instructions for your health care power of attorney so that he or she knows your wishes regarding life-saving or resuscitative measures.
Review your life insurance policy to ensure that it’s current and paid up. If the value is adequate, you may be able to reduce or stop further payments based on your current life expectancy. However, make sure that this won’t endanger the payout to your loved ones. You may also be able to sell it to an irrevocable life insurance trust. Whatever you decide, ensure that your beneficiary designations are current.
Also confirm that the beneficiary designations on your retirement accounts, investments and annuities are accurate. Many people think that the beneficiaries named in their wills apply to all of their accounts. However, they don’t. You need to make those designations separately for certain types of accounts.
Consider making your final charitable donations while you’re still alive. Many people leave a substantial part of their estate to non-profit organizations that do work they want to support. If your estate is large enough to be subject to estate taxes ($5.45 million for a single person and twice that for a married couple), this can save your heirs those taxes. However, even if your estate isn’t at that level, making these donations while you’re alive can still provide tax savings to those who inherit your estate.
These are just a few of many things to consider if you are doing your estate planning near the end of your life. Your California estate planning attorney can advise you on other options to help more of your estate go to your heirs and beneficiaries and less to the government.
Source: NASDAQ, “6 Estate Planning Tips for Those Approaching Death,” John M. Goralka, accessed Sep. 15, 2016