Building up enough savings to retire comfortably is important, but it is not the only factor that people in Texas should take into account. Making sure that one also has the correct estate planning documents is also essential. This includes completing Transfer-on-Death designations, powers of attorney and advance directives.
A Transfer-on-Death designation — sometimes referred to as Payable-on-Death — gives people the opportunity to assign their investment accounts to named beneficiaries. For example, consider a taxable brokerage account with stocks. Should its owner have designated a beneficiary prior to his or her death, then the account would pass on directly to the beneficiary. Without a TOD or POD designation, that same investment account would be lumped into the often expensive and time-consuming probate process.
Since most people spend the majority of their working lives saving for retirement, the idea of losing financial control during later years can be uncomfortable. But the reality is that as people live longer, it is not uncommon to need help making important financial decisions. By creating a power of attorney, someone can give a trusted individual authority to make financial decisions on his or her behalf when necessary. The same can be done when it comes to health care decisions.
Blindly giving someone the ability to make health care decisions is not necessarily a good idea, though. Instead, an advance directive should always accompany a health care power of attorney. An advance directive will provide guidance to the person named in the power of attorney, as it will contain the creator’s wishes regarding medical care.
None of these documents should exist solely on their own. Along with things like wills and trusts, these documents serve to round out and support estate plans. Navigating estate planning and retirement on one’s own can be confusing, though, especially when there are many different documents and paths to consider. Finding guidance from a knowledgeable counsel could help Texas residents who are unsure of where to begin.