Estate planning is an important part of retirement

Estate planning is an important aspect of your retirement plan, but some people, despite near the golden years, might not understand what this entails. I hope, therefore, that this article will help to educate you about this important part of life as you make plans to start your retirement.

It is the process by which decisions are made regarding managing and distributing an individual’s assets during a person’s lifetime, should the individual become incapacitated or in the event of the person’s death. It involves making wills, preparing powers of attorney, and establishing trusts. Power of attorney is an estate planning tool that allows you to appoint someone to make decisions on your behalf in case you become incapacitated. The power of attorney ends upon death. A will is operative upon death.

Consulting with qualified professionals, such as attorneys, accountants, and financial advisors greatly enhances retirement and succession planning. Health issues can arise at any time that undermines the mental capacity to make decisions on your own. If you have accumulated assets and hope to provide a legacy for your loved ones, then estate planning has to be integral in your planning for retirement. It involves taking an inventory of your assets. You can consider joint ownership of assets, such as adding a joint account holder to your investment but make sure it’s someone you trust. For seniors, adding a joint account holder can prove beneficial in circumstances where a senior is unable to access funds due to location or health reasons. A joint account allows ease of transfer of assets should one party dies. Making a will is always a good idea, and saves much headache when winding up an estate after the owner passes on. Think about whom you want to benefit from your estate when you die. Choose beneficiaries for life insurance policies, and other assets carefully. It’s also proactive to consider contingency beneficiaries, in case the beneficiary dies while you are still alive or if the beneficiary’s circumstances changed. Choose executors wisely. An executor is the one who will have the responsibility to manage your assets after you die and also oversees the distribution of your estate in accordance with your will. Protect important documents relating to your estate.

Retirement planning is incomplete without focusing on estate planning. As long as assets are accumulated, estate planning becomes even more important to the retirement process.


Receiving an inheritance can be a windfall for some beneficiaries. But how long does the inheritance last? What about the death benefit proceeds received from an insurance policy? How much of it is reinvested? Are proceeds used to purchase or invest in assets that will increase in value, such as real estate, stocks, bonds, and business ownership? Proceeds from inheritance can be used to supplement retirement income. Studies show that one-third of persons who receive an inheritance have no savings within two years. The majority of the beneficiaries of an inheritance dispose of it quickly. It’s advisable that as a recipient of an inheritance, careful thought be given to keeping emotions under control and reducing the propensity to spend. Give yourself enough time to employ the right investment strategy to grow your inheritance. Don’t be too hasty to spend.

There are those retirees who are keen on creating generational wealth and are concerned about succession planning. They recognised the need to seek advice from experienced, qualified, and trusted advisors to organise their retirement portfolio. Recipients of inheritance may consider creating or replenishing their emergency fund. An emergency can happen at any time, and it may just occur immediately after a spending spree. After securing your emergency fund, assess any high-interest debt. Proceeds from an inheritance can be used to pay off high-interest debts such as credit cards. It may not be wise to pay off your mortgage using your inheritance, as your circumstances can change quickly. If you are still in the workforce you may lose your job, and the inheritance could provide much-needed income to continue the monthly mortgage payments and avoid the risk of running out of money and accumulating debt.

Grace G McLean is financial advisor at BPM Financial Limited. Contact her gmclean@bpmfinancial or and visit the website: She is also a podcaster for Living Above Self. E-mail her at

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