Estate planning is important for people of all ages, but as we age, the need for planning becomes even more critical. Many people avoid estate planning because they do not want to think about the end of life, failing health or disability. Others believe that an estate plan is only for rich people. However, an estate plan is helpful for the senior adult and their families regardless of overall wealth.
The estate is all the property owned both individually and jointly, including bank accounts, real estate, jewelry, etc., and what is owed. Without an estate plan, it is very difficult to carry out a person’s wishes and can bring on a long, drawn out probate that can be very expensive for the family. If an estate plan is in place, it can provide peace of mind for the senior adult and his or her family, as well as protection for the wishes of the senior.
Below are four basic guidelines for what should be included in an estate plan.
1. Will. A will provides for an executor of the estate, who will take care of managing the estate, who will take care of managing the estate, paying debts, and distributing property as specified. The distribution of assets can be outlined in the will. This can be as broad or detailed as a person wishes. In a will, beneficiaries and guardians for minor children should be assigned. It may not seem necessary to discuss minor children when discussing seniors and estate planning, but with the rise of grandparents raising grandchildren, this may indeed be an important part of the will. An adult can spell out in the will or cremation authorization how they want their funeral and burial to be carried out as well.
2. Healthcare Power of Attorney. A healthcare power of attorney is also a key part of an estate plan. This legal document provides for someone to legally make healthcare decisions for the person granting the healthcare power of attorney, or principal, of any age. A durable power of attorney will remain in effect for the principal if the principal becomes unable to make decisions. In New Mexico, this document should also contain the principal’s wishes for end of life medical care and what medical treatments the principal would or would not like to have in specific situations. Noting end of life decisions in a healthcare power of attorney prevents other family members from enduring the stress of having to make those kinds of decisions without any guidance and can help keep peace in families during difficult and emotional times.
3. Financial Power of Attorney. A financial power of attorney names an agent who has the power to act in the place of the person granting the power of attorney, known as the principal, for matters relating to finances. The durable financial power of attorney stays in effect if the principal becomes unable to handle his or her affairs. By having a financial power of attorney in place, the stress and expense of a guardianship can often be avoided, and the principal has the final say in who will make decisions relating to finances.
4. Trust. Setting up a trust can be beneficial for the distribution of specific assets or pieces of property. The benefit of a trust is that it does not go through probate, as compared to a will. Property is still distributed at the death of the grantor, but it is done without the need of a court. This also allows for privacy of the grantor, where with a will and a probate, all of the deceased person’s assets and the terms of their will is made public.
Having an estate plan is necessary if you or your loved one wishes to have a say in what happens in the end of life and with assets after death. Contact our office for guidance and assistance with all of the necessary parts of your estate plan. We will help take the guesswork out of estate planning.