The senior population is growing rapidly. According to the U.S. Census Bureau, by this year there will be twice the amount of seniors that there were in 2000. That’s because the first Baby Boomers will turn 65 this year. Boomers should start thinking about estate planning now if they haven’t already.
Estate planning is the process of dissolving the items and property owned, as well as making end-of-life arrangements. Taking steps while one is physically and mentally able ensures that plans will be carried out as a person desired. It can also alleviate some of the burden on surviving family members when the time comes.
There are a number of things individuals can keep in mind when planning their estates and making other important decisions.
- An estate plan is important regardless of personal wealth. A person with only $10 to his name can still draw up a plan.
- It’s never too soon to start estate planning. While it’s hopeful to expect a long life, sudden illness or other conditions are impossible to predict. Taking the time now to create an estate plan ensures that desires will be met and family will be left knowing how to carry out a person’s wishes.
- Estate planning involves a will, power of attorney or executor of estate, a living will or healthcare proxy, and a trust.
- A will is perhaps one of the most important estate planning documents to draw up. It wills where assets will go and who will be in charge of financial and personal affairs when a person dies. It is inexpensive to draw up a will (there are even legal forms a person can purchase to do it oneself) even if an attorney is hired. At the least, everyone should have a will.
- Compile a list of all personal assets and account numbers. It will help others sort through personal effects when the time comes.
- Boomers should talk about their plans. Inheritances and wills can be tricky business and one that causes heated debate during a time of great emotion. Talking about plans beforehand allows surviving family and friends to be aware of what lies ahead.
- Consider reducing your estate. Individuals can give up to $13,000 per year ($26,000 if gifting as a couple). This can reduce the potential tax burden on a spouse or a family member if estate funds are given to them after a person’s death. Unlimited medical and educational bills can be paid if they are made payable directly to the institution where the expense was incurred.
Baby Boomers in the prime of life may not want to think about estate planning and end-of-life issues. However, it’s never too soon to set a plan in motion to protect loved ones.