As you approach retirement age, it's likely that you have amassed more than when you first started out. Moreover, you have gained a wealth of life experience that has shaped your goals and values. If you have children, they have now entered adulthood. This provides an opportune time to revisit your estate plan to reflect potential changes in your financial circumstances since the initial drafting of your documents, your long-term healthcare needs, and the implications of your children's transition to adulthood.
Your trust documents may need to be reviewed based on your current financial situation, your health and marital status, and your beneficiaries. You may have accumulated assets that you did not place in your trust, or are now thinking about the best way to pass these on to your children and possibly grandchildren.
Your power of attorney and advance healthcare directives should be re-evaluated and updated. Over time, our health and wellness needs typically become more complex, making it essential to ensure these documents accurately reflect our current wishes regarding medical treatment and decision-making. Additionally, the person you initially appointed as your power of attorney might no longer be the best fit due to changes in their situation or your relationship with them. Perhaps they have moved away, or are dealing with their own health issues, which could complicate their ability to act on your behalf. This also provides comfort to the recipients of these documents, because they will be drafted recently and are more likely to reflect your current wishes.
Beneficiary designations determine who will receive the proceeds from various assets, including life insurance policies, retirement accounts, and annuities when you pass away. At retirement, you may have started to receive required minimum distributions from your retirement accounts, or rolled over your employer's plan into an IRA. These are large shifts in finances and may necessitate adjustments in your estate plan to make sure your assets are distributed in the most tax-efficient manner. Also, your children are likely now adults and may be in a position to handle inherited assets more responsibly, or you may have new grandchildren you wish to include. Marital status can also change over time, and a divorce, remarriage, or the death of a spouse could drastically alter who you want as your beneficiaries.
Finally, it may be an appropriate time to consider gifting strategies. Gifting during retirement may allow you to reduce your taxable estate, provide for immediate financial assistance to beneficiaries, particularly if they are attending college or starting out in their careers. It also offers the unique satisfaction of witnessing your beneficiaries use and appreciate gifts during your lifetime.
There are pivotal moments in life that present ideal opportunities to evaluate your existing estate plan. Retirement, in particular, offers an excellent occasion to assess any long-term shifts in your financial circumstances since your last review. It provides a valuable chance to secure the peace of mind that comes from knowing your plans align with your intentions and will be executed according to your wishes.