Nearly half of Americans over 55 do not have a will, and fewer have a health care directive and durable power of attorney. All this is despite most older adults recognizing the importance of estate planning.
The task of writing a will and deciding what you want to be done with your possessions once you pass might feel gloomy. Perhaps you have avoided it because you do not want to face the reality that awaits all of us. Or maybe you don't know where to begin. However, estate planning is one of the best things you can do for yourself and your loved ones.
Sally Hurme, an attorney with AARP, says planning in advance can save your family time and money.
A will is an important way you can stay in control over who gets what of your property.
A will helps your family fulfill your wishes and assures that they won't have to spend months in court after you are no longer here. Therefore, if you or an elderly loved one has put off estate planning, start with the basics and understand its importance for senior citizens. Here is what you need to know and do about estate planning.
What is an Estate?
Senior citizens often believe they shouldn't concern themselves with estate planning unless they are rich. However, an estate doesn't have to be a luxury mansion in the countryside or a fat bank account. In reality, estate refers to all the possessions you leave behind when you pass away. And even if you don't own the house that you live in, you most certainly have some estate. For instance, your jewelry, furniture, and car are part of your estate. Also, if you have pets, they need to be taken care of after you pass. Investments, benefit plans, and life insurance are also worth mentioning.
Estate planning for senior citizens has its importance as all you have on your name and not only will be passed to whomever you choose.
What is an Estate Plan?
Estate planning is the process through which a person decides what happens to their possessions when they die. You or a family member can do it, and it's the most reliable approach to ensure that goods get where they are supposed to go. Although we frequently associate estate planning with wills, a will is only one component of an entire estate planning strategy. With an estate plan, you can also name a beneficiary, set up a power of attorney, minimize taxes for heirs, or appoint an estate executor. In addition, you will give your loved ones a piece of mind, and that is the essential aspect.
Why is it Essential to have an Estate Plan?
If you die without everything set into place, it is up to the court to decide who receives what. Furthermore, each state has its own estate distribution regulations. Therefore, the results may vary. Typically, however, all of your belongings are handed to a close relative or split between your children. Even if you don't believe this is a big deal unless you are wealthy, not being prepared might hurt your loved ones when they are grieving. For instance, your family might have to fight in court for months or even years to get their inheritance. As you can imagine, this can result in significant financial losses as they must hire attorneys to represent them in court. As a result, don't ignore the importance of real estate planning for senior citizens and protect your family.
If you want to ensure that your grandchildren will inherit your estate, don’t ignore the importance of estate planning for senior citizens.
When Should You Make an Estate Plan?
Because everyone has different needs and difficulties in their lives, identifying the best time to begin estate planning can be difficult. However, there are some indicators that it might be time for an attorney and make a plan for the future. Here are some examples:
If you become incapacitated, even if for just a short while.
If you remarry and have children from both marriages.
If you have minor children in your care.
If you have a special needs family member who is dependent on you.
Whenever you want to ensure that the family assets stay in the family.
If you need to protect your or your family’s business.
Meanwhile, if you decide to downsize before retirement and save some money to guarantee your family has enough for burial and other arrangements, make sure you include that money in your estate plan. At the same time, remember that transitioning to your new house may require some expenses, and you may require that money for yourself. For instance, if your new home is smaller, you might need some funds to pay for the extra furniture you have to be kept in a storage unit. As a result, as we mentioned earlier, you are the one that needs to decide when you will start your estate planning and what it will include.
What to Consider When Making an Estate Plan?
When you start thinking about estate planning, you should consider some details that are more or less significant to you and your family members. At the same time, make your planning easier by following some simple steps. For instance, start by making a list of all your assets. Then consider what you want to leave to who, especially if you have certain goods that specific people would like to inherit. Also, determine if any family members could benefit from a trust fund. Or if your family can cover your funeral expenses and debts. Finally, think of a trustworthy family member that can administer your estate or choose a lawyer or an accountant if you don’t have close relatives.
Before making and signing your will, think carefully about who and what you will put in it.
Review Your Documents Periodically
Life is unpredictable. As a result, reviewing your estate plans is recommended every couple of years. You must also update your documents whenever a significant life event occurs, such as marriage, divorce, or loss of a spouse or child. In addition, if you sell a business or property, gather income, or form a trust, you again need to change the documents.
Don't forget that significant health events might cause you to reconsider your wishes. This is especially true for advance directives (living will and durable power of attorney for health care). Don't forget your will and power of attorney, as those might need an update
End-of-life considerations, including hospice, should be discussed with family and medical professionals. The National Hospice and Palliative Care Organization says having an open, honest conversation with loved ones will benefit everyone.
An open, honest conversation about end-of-life will relieve loved ones and healthcare providers of the need to guess what you would want if you are ever facing a health care or medical crisis.
Choosing what to do with all the assets you have gathered over the years can be difficult. However, when deciding how to prepare loved ones for the future, the importance of estate planning for senior citizens is essential.
Most people just make a will or some kind of trust. However, each person faces different challenges, and the best way to prepare for the inevitable is to meet with an estate planning professional. Remember that each state has its own laws for the estate planning process, so talking with a lawyer is the best place to start.
Remember, long-term care costs are generally not protected by most trusts. There are a few trusts that are protected from Medicaid spend-down requirements. Partnership Long-Term Care Insurance will provide dollar-for-dollar asset protection. This gives the policyholder a way to shelter part of their estate based on the total amount of benefits paid by the policy and still qualify for the Medicaid long-term care benefit.
LTC Insurance cannot be purchased when someone has poor health or already requires care since the policies are medically underwritten. Premiums are based on several factors, including your age when you get coverage, the amount of benefits within the policy - plus health and family history. Like most estate planning, most people get long-term care coverage in their 50s.
About the Author
Jane Stinson is a relocation specialist who has worked with many seniors over the years. Having seen how hard some of them have taken it, she has decided to start blogging about helping seniors, and younger generations, move to their new homes. Jane aims to make the whole experience more comfortable. In her free time, she enjoys reading and gardening.
Contributor since March 26th, 2021
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