8 Estate Planning and End-of-Life Decisions You Need to Decide

8 Estate Planning and End-of-Life Decisions You Need to Decide

Many people do not plan for the eventuality when they are no longer living. In these cases, this occurs because they do not believe they have enough assets to distribute to their heirs. This thinking is wrongheaded because estate planning is about making several decisions about how you would like things to be after you pass away, so it is not just about money. The following eight decisions are important things that you may want to decide before it is too late and a court has to decide for you.

1- Create a Living Will

This document will contain your wishes if you fall into a vegetative state or receive a terminal diagnosis. Specifically, you can let your family members and your physicians know how you want your pain to be managed. If you want to donate your organs, you will express that desire in this document as well. This is also the document where you let family members know what types of life-preserving measures you wish to have and which you do not wish to have.

2- Select a Healthcare Power of Attorney

The Living Will will not address the issue of the person who will make decisions for you if you are incapacitated. This is what the Healthcare Power of Attorney will designate. You will choose this person to enact the decisions you prepared in the Living Will. You will want to choose someone who can remain strong against the opposition if your family, for example, disagrees with your wishes.

3- Set Up an Advance Directive

In some states, they combine the Living Will and the Healthcare Power of Attorney into what is called the “Advance Directive.” No matter what state you live in, it’s important to have an advance directive set up as well.

4- Write a Last Will and Testament

The Last Will and Testament is where you will list the beneficiaries of your assets. This document needs a personal representative or an executor to fulfill your wishes. The Last Will and Testament is also the document in which you will name a guardian for your minor children. This is highly important because, if you pass away without a Will naming a guardian for your minor children, the court will appoint someone, but you will not have any say in this decision.

5- Set Up a Life Insurance Policy

Life insurance is often an integral part of financial planning. For example, a life insurance policy provides the funds to purchase assets in buy-sell agreements. Many people use them to pay estate taxes and other expenses. It may also prevent the sale of assets by paying income taxes that beneficiaries of your assets may be required to pay.

6- Select a Durable Financial Power of Attorney

You will select this person to make financial decisions for you if you are incapacitated. The duties of the Durable Financial Power of Attorney are extensive and give this person the ability to sell property, make investments, file tax returns, and pay bills. The ideal person to choose for this job is someone who knows how to handle money and is someone whom you trust.

7- Set Up a Trust Fund

You can divide your assets and place them into a trust that benefits several people. A grantor is the person who sets up the trust, and the trustee is the person who manages the property that you place in the trust. The trust allows you to make sure that your beneficiaries do not lose the assets you leave them. The assets you can place in a trust include life insurance policies, proceeds from annuities, real and personal property, retirement accounts, and bank accounts.

8- Set Up a 529 Plan

The 529 plan is a savings plan for future education costs which is a smart choice if you have children or grandchildren. The money you put into the account will grow faster because the taxes will be deferred. When the time comes to begin making withdrawals, you will be able to do so without paying taxes if the withdrawals are for qualified education expenses.

It’s important to take time to prepare for your end-of-life arrangements because everyone will eventually die, and it’s best to be legally prepared so both you and your family are protected. Speak to an estate planning lawyer about your options and which are best for you.