Certainly, estate planning can be helpful at almost any age, but those who are 65 and older face a greater urgency. They simply don't have as long to craft the perfect plan, and they've had far longer to accumulate wealth and assets that have to be passed on to their heirs. In addition, retirement itself can alter those assets. A retirement investment account or a pension plan may begin paying out, for example. Below are four important tips that you should keep in mind moving forward:
1. Check up on your life insurance policies.
The last thing you want is for a policy to lapse right before it would have paid out, potentially costing your heirs a significant amount of money. Check to make sure that all payments have gotten in on time. If the policy has lapsed, consider enrolling again if it's financially feasible.
2. Consider giving to charities.
Not only does this allow you to do good with your money - a reward in its own right - but it can help to lower the impact of estate taxes. It gives you a bit more control over where your money goes and your heirs will appreciate it if the tax obligations are reduced.
3. Give to your heirs.
Similarly, another way to reduce the taxes is to start giving to your heirs now. There are limits on the amount you can gift to someone during the year without paying taxes. However, if your estate is just barely going to be over important tax thresholds, it may be worth it to spend a few years giving gifts to your heirs in advance. This will keep that money from being taxed initially and potentially drop your estate's total value under those thresholds.
4. Prepare for medical issues that could cause you to be incapacitated.
It's hard to think about, but the reality is that you could soon be facing a scenario in which you can't make all of your decisions on your own. For example, even if you feel healthy today, something like a stroke can strip you of many of your mental and physical abilities in a second. You want to have an estate plan that is complete enough that it transfers the power to make decisions on your behalf to the heirs you'd like to be in charge.
You can then discuss your wishes and desires with them, as well as getting some of these things down on paper. Putting off making tough decisions is a risk, but proper estate planning ensures that your desires are followed no matter what happens.
The key to a successful estate plan is to decide what you want and be proactive about getting the legal side squared away. Understand the unique challenges your estate will face and what you can do to overcome them. Even if it feels like you're doing it years or decades too early, you may be happy just to get your estate plan in place and find the peace of mind that comes with knowing you've done all you can to help your heirs.