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Start Your Estate Plan

Everything you need for estate planning.

Start or update your estate plan

If you already have an estate plan, a good resolution to set is updating that estate plan. If you are looking to make your first estate plan as part of your resolutions, there are several key documents to set your sights on. 

Last Will and Testament

One is a Will, also known as a Last Will and Testament. A Will is your set of instructions for the transfer of your assets after you die to those you name in the document. A Will also informs the court who you would like to care for your minor children and your pets. You can name a guardian to take care of your minor children and also make provisions for the care of your pets. Note that a Will does not avoid the probate process, which can be expensive and time-consuming for complex estates or those with significant assets. To bypass the probate process, consider seting up a Living Trust

Trust

A trust is a legal document that establishes a separate entity with its own rights and obligations. Working with a lawyer, you can retitle assets to the trust for the benefit of your family, loved ones, or charities. The trust owns the property, which means it isn’t part of your estate and therefore doesn’t go through the probate process. In a trust, the owner of the assets puts them in the trust and gives the trust the authority to manage the assets for the benefit of the beneficiaries. A trust can be created to give legal protection to assets to make certain that they are distributed according to your instructions. Plus, trusts can save time, reduce paperwork, and sometimes reduce inheritance or estate taxes.

Power of Attorney

One document that you may want to prioritize while you are still alive is a Power of Attorney (POA). There are two types of POAs for two distinct functions. However, both documents protect you in the event that you are unable to make certain decisions for yourself. A Health Care Power of Attorney provides an agent that you name with the authority to make medical decisions on your behalf if you become incapacitated. Having this document signed and available eliminates conflict within a family as to what you may want as far as treatment and care. Other types of Power of Attorney documents can give someone you designate the right to handle your finances, business, or more, in the event you become unable to take care of them for yourself.

These are just a few of the documents to include in your estate plan. And if you already have these documents in place, make it your legal New Year’s resolution every year to review and update your plan.

Protect your life savings and prepare for retirement

New Year’s resolutions are a time to look forward, and a big part of looking forward is thinking about saving for retirement and protecting your assets. 

Healthcare Costs

Many people are living longer, which translates to higher costs for a financially sound retirement. As a result, it is wise to plan for health care costs and consider long-term care insurance to protect your savings, which may have to cover the cost of nursing homes, assisted living, and home health care expenses. Some types of long-term care insurance allow a surviving spouse or partner to use unused benefits. And some even return some or all of the premium if the original policyholder dies without using the benefits.

Retirement Planning

Another important step is to prepare for inflation, which may impact your retirement income by increasing the future costs of goods and services, thereby reducing the future purchasing power of your savings. Also, you might opt to build a diversified mix of stocks, bonds, and short-term investments based on your comfort level with market volatility, your overall financial situation, and the duration of your investment. A diversified portfolio, in general, can act as a buffer against economic volatility and lead to long-term growth in investment savings.

Elder Fraud

Elder fraud cost seniors more than $966 million in 2020, so it is important to be vigilant to protect against identity theft scams. Common plots include romance scams, grandparent scams, fake prize scams, investment scams, and government impersonation schemes. Educate yourself or your elderly loved ones about common scams that can wipe out a person’s hard-earned savings.

Avoid the rush and get your tax prep done early

Another area of financial care that you can resolve to improve is your organization and preparation for your taxes

Organize Documents

You can start by setting some achievable goals, like making a concerted effort to keep better records. Create a set of files, either in hard copy or electronically, to sort and separate your tax data into categories, such as income, deductions, and business information

Start Early

Another resolution might be to prepare and process your tax return documents early to avoid tax season rushes, and to also receive your refund earlier or to prepare for paying what you owe. You might also consider taking advantage of savings opportunities with your traditional IRAs and Roth IRAs. In 2022, the maximum contribution you can make is $6,000 ($7,000 if you are 50 or older). In 2023, that limit increases to $6,500 ($7,500 if you are 50+).

New Year's resolutions are a great way to start thinking seriously about legally protecting yourself for the future. If you have questions about estate planning, retirement planning, and tax preparation, consider reaching out to a Rocket Lawyer network attorney to help kick off a financially and legally healthy new year.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.


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