Ready or not, life happens.
I’m talking about estate planning. No, it isn’t just for the wealthy, and it isn’t just to prepare for death. Each of us can benefit.
Yes, estate planning is about what to leave relatives and friends, but it also is about taking care of yourself if you are incapacitated, even if for a short time. Estate planning is more than writing a will. A will is certainly a part of it, but you also need to address financial, tax, medical and business planning. This planning can be complex or simple depending on your situation and your family’s situation.
Please, do not stick your head in the sand and do nothing! Here are some questions to ask yourself:
Say you go in for a small surgery and during that time you are not able to represent yourself or your wishes, who has the legal right to do so?
Is there a difference between a revocable trust and a will? Which would be most effective?
Who will manage your assets, even if it’s just for a month or two? What if you’re traveling out of the country for several weeks, do you have your plan worked out? Have you made arrangements for your children in the event you are unable to care for them?
If you die tomorrow, who needs to be taken care of? What are their needs and for how long?
Who will take care of children younger than 18, especially if the other parent isn’t available? If he or she is available, what does he or she need to know?
Are the heirs capable of handling the money/assets they will inherit? This is relevant regardless of heirs’ ages. A 60-year-old might suddenly inherit a large chunk of money but have no experience in planning for its long-term use. It is amazing how fast $400,000 can disappear or how long it can last with planning.
Do you have beneficiaries listed on documents for your assets? When was the last time you checked that information and is the contact information current? Can the bank or insurance company contact your heirs easily?
Beyond assets, what values do you want to pass along?
Do you have a list of websites and passwords written in a safe place where your heir can find relevant financial information?
If you don’t have an estate plan (the appropriate documents filled out, signed and witnessed), the state of Colorado will initiate the process of sorting out your assets. This is a detailed and possibly expensive process that will eat away some of your assets. This might be real estate, stocks, furniture, vehicles, jewelry, collections, insurance proceeds, retirement accounts and the list goes on.
email@example.com or 382-6461. Wendy Rice is the family and consumer science agent for the La Plata County Extension Office.