Legal Documents Retirees Need to Start Their Estate Plan

Before you step into retirement, take the time to create legal documents that will protect you and your assets now and after you pass. Discover the steps you need to take now.

by Brette Sember, J.D.
updated May 02, 2022 ·  4min read

Before stepping into retirement, it's essential to take the time to create legal documents that will protect you and your assets now and after you pass. Most people plan to create only a will to distribute their assets, but a trust gives you more control, and a health care power of attorney appoints someone to make decisions for you when you can't.

Legal Documents Retirees Need to Start Their Estate Plan

Setting up a complete estate plan will help you plan for all eventualities and relax into your new life, whether for you, that means hitting the golf course or packing up the RV.

Why You Should Make an Estate Plan Now

Retirement is a signal of change. "It is always good to review your estate plan whenever you have major changes to your life, be it a new job, marriage, birth or adoption of a child, retirement, or death in the family," suggests Matthew Erskine. Esq. of The Erskine Company in Worcester, Massachusetts. "This is because some of the assumptions you made when you [initially] drafted and executed your estate plan may now no longer be valid."

Your family may be different, say with added grandchildren or a new spouse. Now that you're retiring, you're also changing how you earn, manage, and spend your assets.

Erksine points out that a new law called the SECURE Act has changed how some retirement plans will be distributed to your heirs after your death, so it's important to work with a financial or legal specialist who can help you understand what will happen with those accounts, as well as how you might want to change your estate plan in response.

Why You Need a Will

A will is an absolute requirement for estate planning, because, without one, state laws decide which of your relatives get your assets. Steve Weisman, Esq. with Margolis and Bloom in Boston explains, "With the laws of intestacy, your estate may well not go to the people you wish and in the amounts that you wish. A well-prepared will can specify the conditions and circumstances under which people will receive assets. You cannot do this if the estate is passed intestate." A will also allows you to leave gifts to charity, which are not an option under intestacy law.

You'll want to be sure your will meets your state's unique legal requirements so that it is enforceable, which means making sure it is signed and witnessed correctly. A key decision about the will is your executor, the person who will be responsible for getting the will probated and distributing your assets. Select someone who is responsible, and be sure to ask them first.

The Benefits of a Living Trust

A living trust allows you to access and use your assets during your lifetime, and direct who will get them after you pass, as well as when they would receive them.

A key benefit of a trust, according to Erskine, is that it keeps your assets "protected from creditors, taxes, and long term care costs." Because a trust does not go through probate, it remains private and stays out of the public record.

How to Protect Your Healthcare Rights

Staying healthy is probably a huge focus for you right now, so it's smart to get legal documents in place to protect all of your health care rights. A health care proxy, sometimes called a health care power of attorney or an advance directive, is the way to do this.

Weisman explains that the document appoints "someone to act on your behalf to make healthcare decisions which may, if you wish, include the ability to terminate treatment, but also include the ability to approve various treatments. You get to choose the person to make the decisions on your behalf and even set certain conditions if you wish."

It's important to talk with the person you choose to be sure they are willing to take on the responsibility and to discuss what your actual wishes are.

How to Safeguard Your Financial Affairs

Most people assume that an estate plan has to do with what happens to your assets after you die. While that's an important component, you also want to take steps to make sure that your financial affairs will be protected throughout your lifetime.

Weisman explains that a durable power of attorney "allows you to appoint someone to make financial decisions on your behalf if you are incapacitated. If you do become incapacitated and do not have a durable power of attorney, the courts will appoint someone as your conservator to make financial decisions on your behalf." You definitely want to have control over who will manage your finances, so a power of attorney is a must.

The person you choose will be able to manage your bills, investments, real estate, business, and even make gifts on your behalf. It's a huge responsibility, so you'll want to choose someone you trust who understands your wishes.

Doing the necessary legal work now will mean that your retirement years will be free from worry, with lots of time to enjoy the people and things that you love.

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Brette Sember, J.D.

About the Author

Brette Sember, J.D.

Brette Sember, J.D. practiced law in New York, including divorce, mediation, family law, adoption, probate and estates, … Read more

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.