The website, A Place for Mom, recently posted "Poor Estate Planning Lessons Inherited by Baby Boomers" that has some lessons for all of us to heed when we think about our estate planning.
Wills. The long-term consequences of not having a will are huge. Your assets will go to probate, which can leave your family with huge expenses that will eat away at your wealth. Many folks don't have a will—even though they know they should. It should come as no surprise that many baby boomers are stuck dealing with an estate without a will. This has encouraged many baby boomers to invest their time in making sure that their own children are better prepared. An outdated will can also cause major issues for a family. If you have been divorced or recently widowed and remarried, it is crucial to reflect those changes in your will. Think it would go over well if your estate is left to your ex?
Funerals. If funds are tied up in probate or otherwise inaccessible for funeral planning, it can create considerable stress and a financial burden. In theory, an entire inherited estate can be used to pay for the funeral, but you should have liquid assets available for the funeral. More baby boomers are opting to pre-pay for their funerals or to set up an account designated to use for funeral expenses. US News says that about 23% of people over 50 have prepaid for at least some of the funeral or burial expenses for themselves or someone else.
Healthcare Costs. Unexpected healthcare costs can put a major dent in a retirement plan. Baby boomers need to have early conversations to determine if their parents have included health care costs in their retirement planning. And they shouldn't neglect health care costs in their own retirement plans. People often fail to add these expenses into their long-term retirement planning. You should know your health care costs and account for them into your long-term strategy. In order to plan for health care expenses, you should consider the following:
- Current healthcare expenses
- Details and coverage of each plan
- Plan providers
- Insurance details
- Prescription costs
- Doctor fees
- Current budgets and budget adjustments required for the future
If there are health concerns now, be sure you plan for them long-term. Baby boomers are learning the hard way that it's important to plan for the worst and hope for the best. Trying to find health information in a crisis is stressful. Having family planning meetings and going over all of the possibilities will help when the time comes to deal with these issues.
If you have experienced the loss of a parent, you already know first-hand the importance of strong estate planning and the benefits to surviving family members. Learn from poorly planned estates and implement better planning for yourself and those you love.