If you have not gotten around to creating an estate plan, you are far from alone. A recent survey by Caring.com found that only 42% of American adults have established a will or living trust, and only 36% have documented their preferences for end-of-life care.
People often assume that estate planning is only important for wealthy individuals with significant assets. However, much more goes into a thoughtful estate plan than simply passing on money and property. Here are three tips for end-of-life planning that may help your loved ones to cope after your passing.
1. Take a complete inventory of belongings
While it is important to itemize major financial assets in a will or trust, including bank accounts, real estate and retirement savings, you should also include belongings that have sentimental value. Making a detailed list of whom you would like to receive personal belongings like jewelry, artwork, furniture or collectibles may help ease tensions among family and friends when it comes time.
2. Choose an executor carefully
When creating a will, you should choose an executor to handle the details of settling your estate. It is generally a good idea to choose a trusted family member who understands your values and your family’s unique circumstances and dynamics.
However, the role of executor also takes a great deal of time and responsibility. He or she will need to oversee a wide range of financial and legal details, and the probate process often lasts a least one or two years. Make sure to choose an individual who is trustworthy, capable and diplomatic, since he or she may also need to arbitrate family disputes.
3. Document your healthcare preferences
One of the most important aspects of estate planning is documenting what type of care you want to receive should you become physically or mentally incapacitated by using an advance directive.
In Illinois, there are four kinds of advance directive: a living will that describes end-of-life procedures you are willing to undergo, a health care power of attorney that assigns an agent to make decisions on your behalf, a do-not-resuscitate order indicating you do not want to receive CPR and a mental health treatment preference declaration.