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Why Retirement Planning Should Be Part of Your Estate Plan

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By the time you near retirement, you should have had a comprehensive estate plan in place for many years. Making sure that your estate plan is up to date and reflects your status as a retiree becomes very important as you look forward to retiring. A 2020 survey, however, indicates that when it comes to having the proper estate planning documents in place, most retirees are unprepared. The Essex Junction attorneys at Unsworth LaPlante, PLLC explain why retirement planning should be part of your estate plan.

Survey Says Retirees Are Unprepared

Most people prefer not to dwell on the fact that they will not live forever. The Covid-19 pandemic, however, forced people to face this reality. Consequently, there was a dramatic increase in people interested in estate planning. A survey conducted by the TransAmerica Center for Retirement Studies amid the pandemic revealed a concerning lack of preparation among a substantial percentage of individuals approaching retirement age. Specifically, only 53 percent of respondents had established a Last Will and Testament, 32 percent possessed a healthcare Power of Attorney, and merely 30 percent had a Living Will. Moreover, just 11 percent of retirees had a trust agreement, and a paltry 19 percent had planned for their funeral and burial. Moreover, only one in three retirees acknowledged the absence of any of these crucial estate planning documents.

What Should Be Included in Retirement Planning?

If you are nearing retirement age, it is in your best interest to make sure your estate plan is as prepared as you are for retirement. That means you need to be prepared for the possibility of your own incapacity caused by a serious medical condition as well as the eventuality of your own death. With that in mind, when you head into retirement, your estate plan should include the following:

  • Will or trust. A basic Last Will and Testament provides a roadmap showing how you want your estate assets distributed after you pass away and ensures that your wishes will be followed. You can also appoint an Executor in your Will so you know who will oversee the administration of your estate. A trust agreement is another option that can be used to distribute your assets while also offering additional benefits, such as asset protection, probate avoidance, and incapacity planning.
  • Durable Power of Attorney. The natural aging process usually causes physical and/or mental deterioration, resulting in an increased likelihood that you will experience a temporary or permanent period of incapacity after you reach your “Golden Years.” If you do become incapacitated, someone will need to manage your finances and control your assets. A Durable Power of Attorney can give your chosen Agent the necessary legal authority to take over control. Making the POA durable simply means that your Agent’s authority will survive your incapacity.
  • Advance directives. A Healthcare Power of Attorney lets you choose an Agent who will have the authority to make healthcare decisions for you if you are unable to make or communicate them yourself. A Living Will allows you to make crucial healthcare decisions, such as accepting or rejecting life-sustaining measures, right now in case you cannot make them down the road.
  • Funeral planning component. To ensure that your wishes are honored and to prevent your loved ones from having to make difficult decisions while your loss is still fresh in their minds, a written funeral and burial planning component should be part of your estate plan You can even provide the funding for your funeral and burial through the use of an Irrevocable Life Insurance Trust (ILIT).

Do You Need Help with Retirement Planning?

For more information, please attend one of our upcoming FREE webinars. If you have questions about how to incorporate retirement planning into your estate plan, contact an experienced Essex Junction estate planning attorney at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.

Ellen LaPlante
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