We all hope to leave something behind after we’re gone. For some people, that takes the form of an inheritance for loved ones, money for a grandchild’s college education, a legacy for a favorite cause or even some sentimental items for friends. For others, it’s simply trying to minimize the challenges—financial and emotional—facing those loved ones.
Pondering your own mortality and what might happen to your loved ones can be scary. It’s what keeps most people from creating an estate plan. But taking this step now—and regularly reviewing your plan after you’ve crafted it—can provide confidence for you and your loved ones that your wishes will be carried out.
Here are three questions your estate plan should help you answer.
1. Who makes decisions if I can't?
If you become incapacitated and can’t make decisions for yourself, who will make them for you? It’s hard to imagine putting that burden on your loved ones’ shoulders in such a challenging situation, which is why you should spell out your thoughts in a living will or healthcare directive. State regulations can vary on which of these documents are recognized, so be sure to check with an estate planning attorney for what makes the most sense for you.
- Creating a living will gives you the opportunity to say which medical treatments you would or would not want to receive if you couldn’t make your own choices.
- A healthcare proxy allows you to place someone in charge of making healthcare decisions on your behalf.
- A general durable power of attorney designates someone to manage your day-to-day financial and legal affairs. This person can be authorized to receive income, write checks, pay expenses, file your income taxes and more.
“Before choosing the people in these roles, consider all the things that they would be responsible for,” says Daniel Soo, Senior Wealth Management Advisor with TIAA. “Think carefully about whether they have the time and the expertise to handle them. It also helps to have a trusted advisor, like TIAA, to provide support along the way.”