One of the most important parts of retiring is having plans in place to make sure you’re able to peacefully enjoy your golden years. A lot of those plans come in the form of health directives, power of attorney, long-term care plans (should you need them), and of course, your will and trust.
The reason these plans are so important is because they often come into play when we’re at our most vulnerable and are unable to actually make the decisions for ourselves. This forces your family members to appeal to the court in order to make important decisions during a very stressful time. All of this is to say, having all your ducks in a row is extremely important. It’ll not only give you more peace of mind, but also help your family in advance.
What is an Estate Plan?
Of these plans, one of the most “all-encompassing” is your estate plan. You’re probably familiar with the individual parts of it, but an estate plan is basically your financial and personal power of attorney, your will and trust, and any other directives you want to set up in advance. Usually, an estate plan is put together by a lawyer or a law service and is basically a one-stop-shop to figure out what will happen should you become unable to make decisions for yourself.
The often most forgotten part of the estate plan is the financial power of attorney (POA). This is basically a legal document that selects someone you trust to be responsible for your financial decisions if you’re unable to make them on your own. This includes your taxes, writing checks, and signing off on important documents related to investments/property.
When most people think of a power of attorney, they think of the medical/healthcare version of the document. A medical POA assigns someone to make decisions related to your health. Like which hospital to go to, which treatment options to take, and other life altering choices.
A will is a document that lets you specifically name who gets what when you pass away. You can name a guardian for your kids, choose an inheritor for property or a sum of wealth, and explain what you want when it comes to your final arrangements. A trust allows you to very specifically outline how and when your assets will be distributed. Maybe you want someone to receive a certain amount of money when they turn 18, or maybe you want to have your wealth be given out as individual payments? All of that is possible with a trust!
Within an estate plan you can also set up “directives.” These can be medical or financial directives are actually more general versions of the POA document and allow you to set stipulations such as: a DNR order, a living will, or even a statement about what to do with your wealth (e.g. when to sell property or a stock).
Estate plans also often include an inventory of everything you own and keep a running tab of your beneficiaries/who to contact for emergencies.
Why is it important for retirees?
First off, its important for everyone. But, when you’re about to retire, that means you’re probably sitting on some wealth! That, plus the fact that when you’re older, you’re more likely to need a health directive means you should definitely have one.
If you don’t have one and you are incapacitated, your family will have to appeal to local courts in order to have the right to make important decisions on your behalf. Having to do that while also dealing with the trauma of whatever you’re going through would be very difficult!
On top of that, by creating an estate plan, you’ll be able to truly examine your resources and make sure that you’re able to give what you want to who needs it. Plus, estate planning is a great way to minimize estate and inheritance taxes so that your wealth is actually given to your beneficiaries.
How can I get one?
There are plenty of online resources and websites that can help you get one! But, we highly recommend you go through a legal professional. Not only will they make sure you’re getting the most out of your plan, they’ll also be able to help personally walk you through each individual piece and make sure no stone is left unturned. That being said, we know lawyers are expensive.
Luckily, SDPEBA members have access to MetLife Legal. Through MetLife, you get access to a whole team of local lawyers who are available to help write and review any legal documents that you need! It costs around $10 per pay period for active employees and $21 a month for retirees (another reason you should start considering this even before you retire!), and you’ll have access to the lawyer right away.
How Long does it Take?
Doing it through a form online varies. Some of these sites offer a 48-hour turnaround and others take around a month. Be sure you’re paying close attention when you’re signing up!
If you hire a lawyer, it generally will take 2-4 weeks after your initial appointment to get it all drawn up. It obviously can get more complicated depending on what’s going on in your life, but for the most part, once you’ve got it finished, its finished! And you don’t really need to do much past getting the process started.
Ultimately, it's important to know that an estate plan is easier to set up than you might expect, and also has a massive impact on your life. Without a plan in place, you’re setting you and your family up to scramble to make important decisions later under the stress/trauma of injury, illness, or even death.
If you’d like to learn more about estate plans, check out this video where we sat down with a lawyer and asked her about them!