Four
Must-Have Retirement Documents |
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Are you adequately prepared for that final road
trip of life? If not, when you die you create needless heartache
and loss for loved ones left behind. Estate planning is appropriate
at any stage of life. It's particularly appropriate when you've
got retirement realities on the mind. Here are four essential considerations: |
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- Every adult needs a will. Die without
one, and the state decides what happens to your property. Rarely
will the state's mandate follow what you would do if you had the
opportunity to act. See an attorney to complete a will. It isn't
that expensive and ensures your property will be distributed in
accordance with your wishes. After you complete the will, review
it every few years to verify its validity and conformance with state
law. |
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- Be aware of what counts as an estate
asset for tax purposes when you die. Basically, that's everything
you own, including the face value of life insurance policies and
the current value of all your retirement plans. You may pass an
estate of unlimited value to your spouse at death with no tax consequences.
When that spouse dies, though, there may be some heavy taxes that
cause your children to receive far less than they should. If your
estate is worth at least $1 million, consult an estate-planning
attorney (don't we all wish we had this problem!). |
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- What if you become incapacitated,
either mentally or physically? You might want to look into a durable
power of attorney granted to someone you trust, such as your spouse
or an adult child. You may also want to add a medical power of attorney.
Both will allow the person you select to make decisions on your
behalf. Without those documents, your family will be forced to hire
an attorney, go to court, and have someone appointed as your conservator
and/or guardian to make decisions and conduct business on your behalf.
That's a needless, time-consuming, and costly process that can be
avoided with one or two inexpensive documents that an attorney can
prepare today. |
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- Lastly, you may want to execute
a living will. It's a silly name for a document that really says
you want the right to die a natural death free of all costly, extraordinary
efforts to maintain your life when that life can be sustained only
by artificial means. This document is free in virtually every hospital
in the nation. It makes such decisions easier on the doctor, the
hospital, and your family. |
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Estate planning encompasses much more
than a will. It may be true that you can't live with lawyers, but
you certainly can't die without them. Every month in our Rule Your
Retirement newsletter (fool.com) we show readers how to use a pro's
talents to ensure things work the way you want. |
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Borrowed from a fool.com newsletter,
March 2005 |