If you work hard and plan for retirement, it’s likely that you’ll be able to enjoy your golden years without worrying about money. But if something happens to you before the time comes, who will take care of your family? If a disaster strikes, what would happen to all of your belongings? Estate planning helps you prepare for the future, so that your family gets taken care of during an unforeseen event.
What is estate planning?
Estate is a legal term that refers to everything you own, from the clothes in your closet to real estate. Planning involves arranging for what will happen with these assets when you can’t take care of them yourself. It’s important because it ensures that your designated beneficiaries access your money, property, and other belongings if something happens to you.
What should I include in my estate plan?
There are a number of things to consider when creating an estate plan for retirement. The first one is to appoint a power of attorney. This is someone you trust who will make decisions for you if you’re unable to do so yourself. You’ll also need to decide who will inherit your assets and how they should get distributed. If you have children, you’ll want to create a will that outlines guardianship arrangements in case something happens to both parents or just one.
You’ll also need to think about your health care wishes. Do you want to stay on life support if something happens to you? Would you like to donate your organs or tissues? Estate planning can provide instructions for all of these things.
How about retirement plan assets?
When you have retirement assets, there are additional considerations. If you have a 401(k) or IRA, for example, you’ll need to name a beneficiary. This is the person who will receive the assets in the account after your death. If you don’t name a beneficiary, that money will go to your estate and may be subject to taxes and other fees.
There are many aspects of estate planning but these are some of the most important. Also, remember that regardless of your age, it’s important to review your estate plan annually. You should also update it anytime there’s a significant change, such as marriage or divorce.