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Estate Planning for Seniors

    Estate planning

    There’s a common misconception that estate planning is only for the rich and famous. After all, why would you leave a will if you feel like you don’t own anything.

    The truth of the matter is that estate planning will not only help to preserve your assets while you’re alive, but it’ll eliminate a lot of red tape in future.

    For example, if you have a small house and 3 adult children, you may think that the house isn’t much. But what happens when you pass on?

    Which child will get the house? Will it be sold and the proceeds equally divided among the 3 of them? What if one of them helped you to pay off 25% of the home loan while the other 2 didn’t? Would you want that child to get more than the other two?

    All these pertinent questions can be answered with proper estate planning. Take note: it’ll be best to hire a professional estate planner to guide you here, and preferably someone who specializes in elder law too.

    There are many factors to consider when doing estate planning, and an expert will guide you well.

    Generally, these are the terms you’ll need to understand when doing your estate planning.

    • Estate

    The term ‘estate’ should not be confused with real estate. Far too often, people think of mansions with sprawling courtyards when they hear the word ‘estate planning’.

    In reality, your bank accounts, car, home, investments, and everything else you own is your ‘estate’. You’ll probably realize now that you definitely have some assets and possessions to plan for.

    • Will

    The most common document that’s overused in Hollywood movies where the rich father dies and the spoiled, undeserving kids look to the family lawyer who dramatically reads the will.

    And in true Hollywood fashion, the wealth is left to the kind-hearted housemaid or butler. Makes for a good movie, but it rarely happens in the real world.

    But a will does exactly what is shown in the movie. It’s a document that will stipulate the disbursement of the deceased assets. Without a will, the assets will be divided according to state law which may not be fair to the different family members.

    You’ll need to hire a lawyer when creating a will because an executor is required to carry out the terms in the will. Furthermore, the will needs to be validated legally.

    • Living trust

    A living trust is usually created to prevent one’s assets from going into probate. This will make it easier for the family members and the assets will not become public knowledge.

    If you’re wondering, “What is the difference between a will and a living trust?”, the answer is simple.

    A will only goes into effect once the person (testator) dies. A living trust, however, takes immediate effect. With a living trust, a trustee manages the individual’s assets for the beneficiary.

    This too is often seen in the movies where the rich father places a huge chunk of money in a trust for his wayward son to be held until the boy reaches a certain age.

    • Power of attorney

    The power of attorney is a document that allows someone you trust to act on your behalf in financial or health matters. The person you choose does NOT have to be an attorney, but they must be able to make wise decisions when managing your assets.

    • Advanced medical directives

    An advanced medical directive is a legal document that allows one to state how they want to be treated should they end up terminally ill or incapacitated. They may not wish to prolong their life with artificial means.

    Very often, seniors want dignity in death. Advanced medical directives will help them ensure that.

    These are some of the common legal documents associated with estate planning. While this article gives you a primer on this topic, it’s far more technical than this. You MUST hire a professional for your estate planning. Scribbling your will on the back of a napkin doesn’t quite cut it. So do your research and choose a qualified estate planner to help you.

    “Estate planning is an important and everlasting gift you can give your family. And setting up a smooth inheritance isn’t as hard as you might think.” – Suze Orman