Do you have a plan for your money, items and property (assets) after you pass away? If not, consider creating an estate plan. An estate plan outlines how your assets will be distributed after you pass. It also designates someone to make medical and legal decisions if you are unable to make them yourself.
Below are suggestions for creating a sound estate plan. Be sure to discuss your personal needs with your legal and tax advisors.
Every estate plan should include three legal documents
Will: A will outlines who should receive your assets after your death. It also names guardians for any minor children as well as the person responsible for seeing that your wishes are carried out (an executor). Without a will, the courts decide what happens to your assets and who is responsible for your children.
Durable power of attorney: A durable power of attorney authorizes someone you trust – often a friend or family member – to oversee your finances or general medical care if you’re unable to do so.
Living will: A healthcare directive, or living will, provides detailed instructions about medical treatment allowed if you become incapacitated and can’t make decisions for yourself. It designates someone, often a family member or friend, to discuss specifics about your treatment with medical care providers and to make healthcare decisions according to your wishes.
Keep beneficiary designation forms up-to-date
Some assets are not distributed according to your will. For instance, retirement plans, annuities and life insurance policies require that you name a person or organization that will receive payments if you die. This person or entity is called your beneficiary. Your beneficiary designation supersedes your will.
For example, even if your will directs your life insurance proceeds to go to one person, they will be transferred to the person listed on your beneficiary designation, regardless of what your will says. It’s important to make sure that the name on your beneficiary designation form reflects your current wishes.
An advisor can help
Though these documents provide a good start for your estate plan, you may have questions or need more guidance to get your retirement plan in shape. Consider scheduling an appointment with your TIAA advisor to discuss your own retirement planning needs.