As medical technology advances, people in developed countries like the United States are living longer than ever. As a result, aging populations and their loved ones are struggling to cope with some of the medical conditions that tend to cause incapacity in old age, such as Alzheimer’s and dementia.
Unfortunately in the past, much of the planning geared toward seniors was focused solely on “financial security.” But the reality is that planning for future care needs goes hand in hand with being secure in your golden years. For example, planning ahead for incapacity allows you to make your own decisions and maintain some control, which offers peace of mind and a sense of aging with dignity. Plus, thinking about long-term care costs now can help ensure that there are resources in place if you later need assistance, rather than having to blow through your nest egg.
Expect the Best, But Plan for the Worst
Regardless of your age or family genetics, cognitive impairment like dementia can happen to anyone. Dementia is characterized by gradual memory loss and declining cognitive ability. Consequently, communication with family members becomes more difficult, and managing one’s finances and private affairs becomes more problematic. For this reason, it is important to put the following legal tools in place while you are still healthy and able to clearly communicate your wishes and preferences:
Advance Healthcare Directive
This document enables you to provide instructions about the type of healthcare you do and do not wish to receive in particular circumstances. You also can appoint an agent to carry out your instructions on your behalf should you become incapacitated and unable to speak for yourself.
Durable Power of Attorney (POA)
This document allows you to name a person you trust to manage your financial affairs if you are no longer able to. Your agent will have the legal authority to pay your bills, administer your retirement and investment accounts, sell your assets, and file your tax returns. Without a durable power of attorney, your family members may have to petition the court to appoint a guardian for the right to manage your money and any decisions about your personal affairs. Unfortunately, the court may assign a guardian whom you personally do not want, or possibly do not even know!
This document spells out what you want to happen to your assets after your passing, and also names an executor whom you trust to administer your estate when you are gone. If you have specific wishes about your estate that you want to make sure are honored by the courts, it’s important to create a will while you are still of sound mind and have the ability to sign legal documents. Once a person begins to show signs of cognitive impairment or dementia, that window of opportunity quickly closes.
This estate planning document acts as a “safe” for your properties and accounts. While you are alive, you can turn the job of managing your assets over to a trustee who will follow the wishes spelled out in your trust. Likewise, after you pass away, the assets in your trust will avoid probate, and your trustee will be able to administer them to your loved ones as you see fit. A trust is a critical tool that gives flexibility, privacy, and the maximum level of control.
Again, having a secure future goes hand in glove with having a solid estate and long-term care plan in place. If you need assistance getting started, we invite you to contact our Brandon elder lawyers at (813) 438-8503 to schedule a consultation.