It’s not necessarily the conversation you want to talk about at a dinner party, or to have with your grown children, but having a will in place before you die can save your loved ones unnecessary confusion and anxiety at what is already a difficult time.
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Merrill Lynch and Age Wave released findings from a new study, which finds that nearly half of Americans ages 55+ don’t have a will, despite believing they should have their affairs in order by 50.
Kevin Hindman, national trust executive at Bank of America Merrill Lynch discussed with Fox Business the importance of having a will in place to avoid hardship and turmoil for your loved ones left behind when you pass. Here is what you need to know:
Boomer: If I don’t have a living will in place, what happens to my assets?
Hindman: Americans know they need to plan for their later years and get their affairs in order, especially as retirement approaches. But while people recognize that need, too many aren’t following through and taking action.
When someone passes without a will, it means they have died “intestate” – meaning the intestacy laws of the state where they reside will determine how the property is distributed upon your death. But without clear direction on how you would like critical items like financial assets, property, personal possessions and items of emotional value distributed among loved ones, confusion and disarray are a common end result. Not only does the lack of a will create turmoil and headaches – both financial and emotional – for family members; it heightens the risk that your end-of-life preferences won’t be carried out in accordance with your wishes. On the other hand, a well-prepared legacy can give you the simple and satisfying peace of mind of knowing that you’ve done what you can to organize your life, shape your legacy and leave your family with a roadmap of your preferences. It can be one of the greatest final gifts we leave to those we love.
Boomer: How often should I update my will?
Hindman: There is a wide-held belief that people should have their end of life affairs in order before they turn 50. A critical first step is initiating important conversations with loved ones, along with trusted financial, legal or medical advisors, about later-life preferences and legacy matters. Once you have a legacy plan in order, be sure to review it regularly and update when important changes happen, such as major life events, changes in assets, changes in appointees, or external changes (e.g., new tax laws or regulations).
However, despite Americans knowing they need to plan for their later years, nearly half of people 55+ say they do not have a will – meaning there is still work left to do in translating intent into action.
Boomer: What are the three expert recommended legacy plan essentials and what needs to be included in these documents?
Hindman: The three most important legacy plan essentials are: a living will, healthcare directive and/or proxy, and a durable power of attorney. Yet, just 18 percent of people 55+ say they have all three, putting their late-life preferences and legacies at risk. Key components of each include:
•A will and/or trust to designate the distribution of all assets not already directed through beneficiary arrangements, and often to direct assets into trusts to support family members
•An advance healthcare directive specifying end-of-life preferences, and/or a healthcare proxy designating someone who can make health decisions on your behalf if you become incapacitated
•A durable power of attorney designating someone as attorney-in-fact who can make financial and other asset and legacy-related decisions on your behalf if you become incapacitated
Many Americans need a nudge from family, close friends, or trusted financial, legal or medical advisors to get their affairs in better order. But this process can be less complicated than the unprepared may assume. It begins with open, honest conversations about legacy with loved ones and trusted advisors and ends with a well-formed personal and financial legacy—a final gift of great value to loved ones and heirs.