Creating an estate plan might not be at the top of your to do list. Whether the thought of planning for what happens after your death makes you feel uncomfortable or you feel as though you are in pretty good health, it can be easy to put the task off. However, taking the time to approach estate planning sooner rather than later is usually best.
One of the reasons that an early approach to estate planning is best is because it is impossible to predict the future. As difficult as it may feel, there is no way to anticipate when you might actually pass away. An estate plan can also be useful should you fall ill and need help making important decisions.
Picking an executor
An executor is the person who is in charge of managing your estate and distributing assets.
In Colorado, you can choose your own executor. You do not have to pick a professional, but it is important to select a trusted individual who will be comfortable dealing with important assets like:
- Your house
- Your vehicle
- Non–retirement investments
- Other valuable property
While non–professionals can and often do successfully fill the role of executor, it is important to help your selected executor understand his or her responsibilities. This includes making sure that he or she knows that it will not be a quick process. Successfully settling your estate could be a months or even years-long task.
Using powers of attorney
You can also plan for what happens if you become incapacitated and cannot make important decisions on your own. For example, a health care power of attorney would give one person the ability to make medical decisions on your behalf. This is often accompanied by a living will, which you can use to outline which medical treatments you are comfortable with receiving and which life–saving interventions they may or may not approve of, including:
- Resuscitation efforts
- Feeding tubes
A financial power of attorney is also important should you become incapacitated. The person named in this document would be in charge of your finances if you were otherwise not able to handle them yourself. This task could be managing regular expenses on your behalf, such as mortgage or vehicle payments, as well as making sure new medical bills get paid.
Planning for the future
Living in the here and now might feel more intuitive, but it can lead to unintended consequences. Passing away or suffering a debilitating injury or illness without having a proper estate plan in place often places a greater burden on loved ones. Taking the time to create a will, powers of attorney and other helpful documents can be a great gift to these loved ones.
Estate planning can be confusing, though. You might not be sure which documents you actually need or how to deal with estate taxes. Taking the time to gain reliable information on your planning options could help you build the best plan for your needs.