Are you elderly or are you under retirement age but suffering from a terminal illness? If you are the latter, you may have cancer, leukemia, Lesch-Nyhan Syndrome, muscular dystrophy, COPD, cystic fibrosis, scleroderma, or heart disease. If you don’t already have an updated estate plan in place, now is the time to draft the necessary documents.
We also recommend thinking about what could happen before you die. What if you lose the cognitive ability to manage your own finances and express your wishes about medical care? Just in case this happens, it’s a wise move to designate a trusted relative or friend to help pay your bills, manage your assets and handle your medical care if you become physically or mentally incapacitated.
Here are the steps that need to be taken:
2. Address Minor Children
Do you have children under the age of 18? If so, it’s important that you name a guardian for them in your will. If something were to happen to you and their other parent, the court would place your children with the guardian named in your will. Otherwise, your children could end up in foster care depending on your family’s situation and whether anyone steps up and tries to get custody of your children.
3. Address Your Assets
You want to decide who gets your assets, some of which may involve beneficiary designations. If you want to make it simple, you could say, “Each of my children gets equal shares of my estate” but if you’re married, your surviving spouse would be entitled to a specific share of your assets, unless you disinherited your spouse in a prenuptial or postnuptial agreement.
4. Address Possible Incapacitation
If you were to ever become incapacitated and unable to handle your personal affairs or medical decisions, it’s best to have a durable power of attorney. If you don’t select someone of your own choosing, a judge can appoint someone for you and this person may not be your first or even your second or third choice.
To prevent this from happening and select someone you trust to act on your behalf, create a durable power of attorney, one for healthcare and one for your financial matters. The documents we recommend include an advanced healthcare directive, a durable power of attorney for healthcare and one for finances.
5. Consider Drafting a Living Trust
Living trusts are appealing because they avoid the probate process, meaning beneficiaries receive their assets sooner and the trust avoids probate court fees. Trusts aren’t for everyone, but many families save a lot of money by using them.
Related: Can I Disinherit My Son or Daughter?