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Estate planning checklist: Insurance and pensions

Although sometimes overlooked in estate planning, insurance and pension plans play important roles in your estate planning. Read more about these and related topics below.

• Review your life insurance and pension plan
• Consider buying long term care insurance
• Create a "durable power of attorney" for health care decisions

Review your life insurance and pension plan

Take a look at the beneficiaries you have designated on your life insurance policies and pension plans. Keep in mind that proceeds of any life insurance policy or retirement plan will pass to the persons you name as beneficiary and not to those named in your will. For example, if your life insurance policy names your daughter as beneficiary, she will receive the proceeds from the life insurance policy - even though your will directs that all of your property is to pass to your son.

Consider buying long term care insurance

More than one-third of the people who reach age 65 will spend some time in a nursing home, and the risk is much higher for women than for men. While Medicare will pay for the hospitalization costs of seniors over 65, it pays for only a limited amount of nursing home care. With nursing home care costing as much as $6,000 to $7,000 per month in certain parts of the country, nursing home cost can quickly deplete even relatively large estates. Accordingly, it is extremely important to plan for the funding of long-term health care expenses. While the premiums for long-term care insurance can be high, it is worth considering.

Create a "durable power of attorney" for health care decisions

This document permits you to outline what medical procedures you want taken if you become too ill to state your wishes yourself. It also allows you to determine when extraordinary life extending medical treatments should be terminated. You can also name the person who will make health care decisions for you if you become incapacitated and are unable to make these decisions.