This article was originally published in Business NH Magazine and can be found here.
January 11. 2016
You are on the verge of retirement. Things to do, people to see, places to go and time to do it. But before taking the final leap, make sure you have your documents in order. While this list doesn’t include everything you’ll need, this provides a good starting point. You should speak with your attorney and financial advisor to see what else you need.
Will: This legal document controls the passing of property to friends, family, and other charitable or business entities at death. If you do not have a will, consult with an attorney to draw one up.
If you have an existing will, review it to ensure it reflects your current situation (children and spouse still living, assets the same or substantially similar). If necessary, have your attorney make changes. Without a will, the probate court will distribute your assets based on state law, which may not be what you want.
Trusts: Trusts are legal entities that hold real or personal assets. Trusts can be revocable or irrevocable. Revocable trusts typically are used for holding property for distribution to minor children or for management of assets in old age and to avoid probate. Irrevocable trusts typically are used for tax and Medicaid planning.
You should ensure the trustee is aware of his or her future role and of the location of the trust documents, The trustee should be familiar with the family’s situation and good at handling money.
Durable Power of Attorney for Health Care: This is a legal document in which you nominate a person to make health care decisions on your behalf should you become incapacitated and can’t make them yourself. This document can also provide instructions to your designated agent about which medical treatments you want or do not want.
Financial Durable Power of Attorney: This is a legal document in which a person is assigned to make financial decisions on your behalf.
This document is effective when signed and survives incapacity. It substitutes for a guardianship if someone who loses capacity needs to have his or her business conducted by a third party.
Living Will: This legal document instructs your health care providers whether to give life-sustaining treatment if you are near death or permanently unconscious as certified by medical professionals. In NH, a Durable Power of Attorney form for health care is included and becomes effective only if the agent is not available to act.
DNR (Do Not Resuscitate) Order: This is a written order to your medical provider not to provide CPR in the event that your heart stops beating and you stop breathing. You can give your agent under the Durable Power of Attorney for Health Care the authority to make such an order.
Beneficiary Designation Forms: For almost every benefit or insurance policy (IRA, 401K, life and disability insurance, annuities), you have likely designated primary and contingent beneficiaries, those who will receive insurance or other proceeds when you are no longer alive. Ensure that these forms are up-to-date and reflect your current wishes as there can be unfortunate tax effects.
Insurance Policies: Throughout your life and career, you likely obtained various insurance policies to protect you and your family. Review these policies to ensure that coverage is adequate.
Understand the situations in which these policies may pay out. If you have questions, consult the applicable insurance broker.
Pension Paperwork: Obtain your company’s Summary Plan Description. This document spells out your benefits and other details of the pension plan. Also, ensure you are receiving Individual Benefit Statements, which detail the benefits you are eligible to receive. Review these documents well in advance of retirement, so that you know how much you will receive in retirement. If you have questions, contact your company’s employee benefit department.
Once you have secured the documents outlined above, organize and store them in a safe place such as a fireproof filing cabinet, safety deposit box or at your attorney’s office. Alert those who will be responsible for carrying out the roles outlined in the documents or who stand to receive benefits Typically, the original estate planning documents are at your attorney’s office, so be sure your designated fiduciaries know who that is. The goal of executing and organizing the documents above is to make things easier on yourself as you enter the golden stage of life.