California baby boomers may be thinking about retirement planning but failing to make estate plans alongside that. According to experts, adults of all ages tend to procrastinate about estate planning. However, the lack of a comprehensive plan could make a person’s death even more difficult for loved ones.
Those who are contemplating the preparation of a will should communicate their wishes to loved ones in advance. Better communication reduces the chances that the document will be challenged in court. Furthermore, estate planning is not just about what happens when an individual dies. It also includes preparing a power of attorney, a living will and a health care proxy to ensure that one’s wishes regarding medical care are respected. A power of attorney can also allow the agent to make financial decisions in the event of the incapacity of the principal.
Another important aspect of estate planning is understanding things like estate taxes and the effect that state law may have on the plan. Making sure that beneficiary designations are current is also important. The disposition of the proceeds of life insurance policies, retirement accounts and other assets with beneficiary designations will not be governed by the owner’s will even when the will contains language to the contrary. Those who have been divorced should ensure that their former spouses are not still named as beneficiaries, if that is their wish.
Whether people have many assets or only a few, estate planning is important. Without a valid will or trust document, the state law of intestacy will decide how assets are distributed. An estate plan that clearly indicates what assets exist and what should be done with them will often result in less stress for loved ones in what will likely be a difficult time for them.
