Showing posts with label estate planning. Show all posts
Showing posts with label estate planning. Show all posts

Friday, August 27, 2021

Estate Planning Can Help Heirs Handle Your Affairs Even Before You Die

If you are suddenly hospitalized, or pass away, would your adult children or other heirs be able to figure out what accounts and assets you have, ongoing services which need to be canceled, bills that needed to be paid, and other important information?  Would they know who to notify if you are in the hospital or have died, including friends, landlords, and employers?  Is there someone you trust to have access to your bank accounts in case of an emergency?  Are your heirs aware of what treatments you would accept in the hospital, or whether you have a Do Not Resuscitate order? Do they know if you have a long-term care insurance policy, in case you need to go into a nursing home?  Do your heirs know your funeral preferences or where to find your will and trust?

Most of us would not want to leave our children with a chaotic financial mess to handle if we suddenly become sick, seriously injured, or die, but it happens all the time.  An expected illness or death is difficult enough.  However, when your heirs also have to spend countless hours unraveling the details of your life after an unexpected event, it could overwhelm them.

"In the Event of Your Death" Binder

One solution my husband and I chose to implement was to put together a binder we labeled "In the Event of Our Deaths."  While this notebook would not completely answer all the questions our children might have if we are incapacitated or die, it would certainly help them get started.  We used the notebook to pull together all the information we thought our adult daughters would need if we were unable to take care of our affairs, either temporarily or long-term.  In addition to this notebook, we have also given one of our daughters log-in information for our computers, with access to our bank accounts.

Here is some of the information we put into the binder:

Copies of Our Wills and Trusts
Funeral Arrangement Info
Burial Plot Receipt
List of Who to Contact in the Event of our Deaths
Life Insurance policies
Medical Insurance Info
List of bank and brokerage accounts
Advanced Health Care Directives
Copies of our Driver's Licenses, passports, and other documents

How Else Can We Help Our Heirs Handle our Affairs?

Putting that notebook together will certainly be a big help to our children if something happens to us.  However, it is not the only steps we had to take in order to make things easier for our children or other heirs.  What else should everyone do in order to be well prepared in an emergency?

* Give a copy of the major documents in your notebook to the executor of your will, so they have the information they need, even if they live in another city, or if something happens to you while you are traveling.

Discuss your end of life wishes with ALL of your children or heirs.  This is one way you can reduce the discord between family members if you are unable to speak for yourself, or if you die.  Let them know important things such as whether or not you want to be cremated, and how you want your remains handled afterwards.

Prepare a Heathcare Directive.  In addition to an executor of your will, you also will need a healthcare agent to make decisions for you.  This can be the same family member, or a different person, especially if you are concerned that it may be difficult for your family member to make the hard decisions about your end-of-life care.  Make sure the people you choose for these important jobs know that you have appointed them to these positions and ask them if they feel they will be able to carry out the necessary duties involved.

Sign a Power of Attorney. Make sure you have someone who can handle your finances for you, if you become unable to do so.  You will want an attorney to draw up a durable power of attorney so this person can act on your behalf.  As long as you are mentally competent, you can revoke the durable power of attorney at any time.  It will also automatically end when you die.  You can pick a family member or, if you do not have someone you think would be able to handle this task, you can choose a bill payer service.  Your attorney can help you find someone.

Discuss your bequests and other plans with all your heirs. Make sure everyone knows how your personal property will be passed on to them.  Does someone have a favorite painting, antique, or piece of jewelry they would like to have when you are gone?  Put in writing any special items you are bequeathing to someone, and make that information available to all your heirs.  It will dramatically reduce misunderstandings after you are gone, especially if you are fair to everyone, so no one feels that another family member was treated better than the others.

Estate Planning Documents

You can get your documents prepared by an attorney, and the attorney can also give you advice about who should be your executor and handle other decisions.  He can also provide you with other paperwork you may need.

If your estate is simple and you just want the documents completed, you can find do-it-yourself wills, trusts and other documents online. (Ad) There are a wide variety of online choices to help you get your estate planning organized.  Even if you do not have a lot to pass on to your spouse, children or other heirs, it will be so helpful to them if everything is put into writing, including your end-of-life wishes.

Keep Your Information Up-to-Date

It is important to keep the information in your End of Life Notebook current.  Over the course of a few years, you may move, change your job, open new accounts or even get a new grandchild.   Some of the people on your notification list may have died.  It is important to go through your notebook at least once a year and update anything that might have changed.  It is easy to let that slip, but it is very important.  Time gets away from us all.  However, your notebook will only be helpful as long as the information in it is correct.  

Relax and Enjoy Your Family

Once these details have been worked out, you will feel relieved.  You will be able to enjoy your family visits without worrying about what will happen if you become sick or die unexpectedly.  There will be fewer questions from your children about what will happen to your things if you die.  In fact, it will rarely be a topic of discussion.

You can find gifts for retirees and others at my Etsy Store, DeborahDianGifts:

Enjoyed this post? Never miss out on future posts by following us.  You will receive a weekly email with the most current post.  You will never be contacted for any other reason.
To learn more about financial planning, Medicare, Social Security, financial planning, common medical problems as we age, where to retire and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission at no extra cost to you.

You are reading form the blog:

Photo credit: Pixabay

Saturday, August 15, 2020

Your Money and Adult Children: What Should You Tell Them and When?

Do your adult children treat you like a piggy bank?
Over the next two to three decades, trillions of dollars of wealth will be transferred from Baby Boomers to their adult children.  At the same time, most Baby Boomers will need that money to live on until they pass away.  This creates a dilemma.  On one hand, you want your adult children to have some information about your finances, so they can easily take things over if you become seriously ill, develop dementia, or pass away.  On the other hand, you do do not want your children looking at you and your nest egg as a piggy bank they would like to tap while you are still alive and need the money for your own expenses.  How can you strike the right balance between giving them enough information at the right time, without divulging too much information? 

To make this issue even more difficult, the Covid-19 pandemic has created more stress for many senior citizens.  Thousands of them are falling sick.  Approximately 1000 people a day are currently dying of Covid-19, in addition to other illnesses, and roughly 85% of those Covid-19 deaths are in older Americans.  This presents the very real possibility that you could die much sooner than expected. Before you decide when and what to tell your children, you need to consider all the different issues carefully.

Are Your Children Mature Enough to Handle the Information?

The first question you want to ask yourself is how your children will handle the information you want to reveal to them.  Are they financially and emotionally stable enough on their own, that they will not begin turning to you every time they get behind on their credit cards or other debts?  Are they already building their own retirement accounts and understand the value of saving for the future, or are they living month-to-month, always short of money?  If the situation is the latter, you may want to wait to let them know the full value of your assets, so they do not begin to constantly beg you for help, putting your own retirement at risk.  This is especially true if you have gotten into the habit of rescuing them every time they fall behind.  If they find out you have a large nest egg, they may begin to push even harder for financial aid, making life more stressful for you.  Consider these issues carefully before you let your children know you have accumulated an amount that may seem to them like a great deal of wealth.

Let Them Know If You are Barely Getting By

On the other hand, if you have suffered serious financial setbacks and barely have enough money to make it through the next few years, you should let your children know your situation. First, it will lower their expectations that you can help them financially and give them lavish gifts for holidays and birthdays. Second, they may be able to help you out if your situation becomes dire.  Many seniors who are living only on Social Security have moved into the homes of their adult children, or their children have helped cover a portion of the cost of an assisted living facility.  You and a single adult child may even decide to live together and share the expenses.  Multi-generational families are becoming more common in the United States, again.
Even if your children cannot help you out financially or provide you with a place to live, they may be able to assist you in completing the complicated forms to get additional financial assistance from the state and federal government.  Programs such as SSI (Supplemental Security Income), SNAP (food stamps), Medicaid coverage for a skilled nursing facility, or rent vouchers can stretch your dollars, but the applications can be difficult and you may need assistance to avail yourself of the programs.  These programs can be life-changing, however, so do not hesitate to apply if you need the help.

Make a List of Your Assets and Put it in an Accessible Place

While you may not want to reveal specific numbers to your children, if you have a wide variety of assets, it is wise to make a list of those assets, including bank account and brokerage firm account numbers. If they need passwords to access the accounts, make sure that information is included in the list, too.  Let your children or other heirs know where they can find this information if something happens to you. 

In this way, if you are hospitalized or become seriously ill, your children will have the information they need to access your money to pay your bills, cover your medical costs, and handle any other necessary expenses.

Have a Will, Trust and Executor

Make sure you have a will and trust, (ad) even if it is a do-it-yourself one, and appoint an executor to handle your estate. Give this person your power-of-attorney, so they can act if you are unable to. If you are not confident your children are capable of handling your finances in a responsible way, talk to your lawyer about appointing a paid trustee to handle your finances, should the need arise. 

Even if you do not give your children specific information about your net worth, you still want to let them know that you have a will and trust, as well as the person who will be your executor.  If your executor is one of your children, let the others know that you love them all, but that you chose this person because they have a business background, or live the closest to you, or whatever other reason was behind your choice.

Provide the Contact Information for Your Advisors

If something happens to you, your children may not know where to start in order to move forward.  As a result, along with your will, trust and list of account numbers, you should also have a list of the people who have been helping you set up your finances and estate plan.  This would include the lawyer who drew up your will, your financial advisor or stockbroker, and your banker, if there is one you have worked with closely. 

Make End-of-Life Plans

Finally, while you are still in good health and they are not worried that they are about to lose you, you should discuss your end-of-life plans with all of your children.  Do you have an Advanced Directive or Living Will? (Ad)  Have you made funeral plans?  Do you have any special requests about how you would like things handled when you are near the end of your life or after you die?  You should give this information to your children as soon as you make the plans.

Keep Things Organized

My husband and I have a large notebook we titled "In the Event of our Deaths" and we keep it in plain view on a shelf in our home office.  In the notebook is a copy of our wills, trust, life insurance policies, health insurance information, funeral plans, a list of who to contact, helpful information for an obituary, and everything else we think would be useful to our children if something happens to us.  Even if you are still a young adult, this is good information to put in one place and make accessible to your heirs.  What if you are seriously injured or die in an automobile accident?  You would want your family to easily have the information they need, without spending hours digging through files.

If you take these steps, you can rest easy knowing that your children have the basic financial information they need to help you in an emergency, without divulging so much information that they become dependent on you for financial support.

If you are interested in learning more about financial planning, Social Security, Medicare, where to retire, common medical issues as you age, travel and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission at no extra cost to you.

You are reading from the blog:

Photo credits:  Pixabay