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Legal, Financial and Estate Planning Issues

Legal and Financial Issues

As a retiree, it is important to get legal and financial documentation in order. Assemble a file that includes information about insurance policies, wills, and financial documents. Also, be sure someone you trust knows where your important information is kept. It is often advisable to have a lawyer and/or financial planner help reconcile your financial condition with your needs and desires for the future.

Estate Planning

To put it simply, estate planning involves deciding how you want your assets distributed after you die (or become unable to make your own financial decisions). Estate planning can be complicated, so it's best to consult a financial adviser and a lawyer when drawing up your estate plan.

It's important to have a basic estate plan in place regardless of your net worth. Although it may seem like a morbid chore, estate planning offers several benefits:

  • You get to name the people to whom you wish to give your assets - and your wishes will be legally binding.
  • You can arrange it so that taxes siphon as little as possible from your estate.
  • You have the satisfaction of knowing that your financial affairs are in order, so you won't bequeath a costly administrative nightmare to your loved ones.

An estate plan can include several elements:

  • A will.
  • Assignment of power of attorney, which gives the person you name the authority to manage your financial affairs if you are unable to do so.
  • A living will, which is a statement of your wishes for the kind of life-sustaining medical intervention you want, or don't want, in the event that you become terminally ill and unable to communicate.
  • A healthcare proxy, which authorizes someone you trust to make medical decisions on your behalf.
  • For some people, a trust may also make sense.

Whether you are estate planning or handling legal and financial issues, you may want to:

  • Establish a power of attorney: a trusted individual to act on your legal behalf for a set period of time.
  • Establish a durable power of attorney for health care: name an individual you trust to carry out your health decisions, should you be incapable to decide.
  • Update or make a will: a written statement, which directs the distribution of your assets after your death.
  • Set up a trust: allows a trustee to manage your assets.
  • Update your investments: review and consider whether or not you should rearrange your holdings, make direct rollover to traditional IRAs, change carrier, convert some to Roth IRAs, change beneficiaries, or make any other adjustments now that you have entered a different stage of life.

Some of the above are legal documents that should be prepared and filed by an attorney.