Whether you’re married or widowed, divorced or single, it’s important to have the right documents in place to ensure that you have the help and care you need as you age—and that your estate is handled in the way you want. If you don’t have children, who often become caregivers and beneficiaries, making arrangements for your care and estate often requires more thought and planning.
To help ensure you’re well prepared, you may want to take the following six steps:
1. Choose your advocates wisely — When determining who will help you with your housing arrangements, medical, dental, financial affairs and estate planning, select people you can trust. Whether your support team includes your spouse or partner, a sibling or other relative, friends or a trustee, make sure everyone knows—and will support—your preferences. If the people you enlist are close to you in age, appoint younger backups in case someone becomes unable to carry out his or her responsibilities.
2. Set up a health care proxy — Also known as a health care power of attorney, this document enables you to appoint someone to make medical decisions on your behalf if you become unable to do so. Be sure to authorize this person to view your medical records. Your proxy should include instructions on tissue and organ donation, as well as special instructions about any medical interventions or treatments you don’t want to receive.
3. Consider creating a durable power of attorney document — You have the ability to designate an attorney-in-fact, which is someone you name in a power of attorney document. You can empower this person to make financial decisions on your behalf, and decide if you want this power to become effective immediately, or at a future date — the most common being in the event you become mentally incapacitated. If you don’t designate someone and you become incapacitated, the courts may appoint a guardian for you. A court appointed guardian may be less than ideal because he or she might not have been your first choice (and may not have known you prior to your incapacitation). This lack of knowledge may increase the chances that decisions could be made that you (or someone who knew you better) would not have made on your behalf.
4. Purchase long-term care insurance — It can help you afford the type of care you desire if your health begins to fail. Long-term care insurance helps to pay for services needed for chronic care that are not generally covered by health insurance, Medicare or Medicaid. This can include home care, assisted living, adult daycare, respite care, hospice care and nursing home and memory care facilities. Your policy may also provide additional benefits that appeal to you.
5. Decide how your assets will be distributed — Whether you want to establish a foundation in your name or leave your assets to charity, your spouse, a partner, extended family members or friends, you may want to create a will. An attorney can help you draw up a will that specifies how and to whom your assets will be distributed. Without a will in place, your estate will be handled according to the statutes of the state in which you reside, which may not align with your goals. It’s also a good idea to review your beneficiaries to make sure they’re current on all accounts. Consult with an attorney or other expert to determine if you need a will for your legacy goals.
6. Create a gifting plan — Your estate plan can include strategies for giving financial gifts before or after your death. Under 2014 federal tax law, you can gift up to $14,000 per person to as many people as you would like without gift tax consequences. You can also pay college tuition for anyone without being subject to gift taxes or using any of your annual or lifetime gift tax exclusions, as long as you directly pay the institution.
For help creating financial strategies that support your goals as you age and distribute your estate, consult with your financial professional. A financial advisor can work with your tax and legal representatives to help ensure your wishes are met in efficient ways.
Mullenbrock holds the professional designation of CERTIFIED FINANCIAL PLANNER ™ practitioner (CFP®). He is Financial Advisor and franchise owner of Mullenbrock & Associates-a financial advisory practice of Ameriprise Financial Services, Inc. His practice specializes in fee-based financial planning and asset management strategies and has been practicing for nearly 30 years. Offices are located at 228 West Ash Street, Piqua, Ohio. (937) 773-8500. Web-site: www.mullenbrockassociates.com. Mullenbrock is licensed and registered to conduct business in OH. Based on licenses and registrations held, he may also conduct business in AL, AZ, CA, CO, CT, FL, GA, HI, IL, IN, KY, LA, MI, MN, NC, NH, NM, PA, SC, TN, VA.