Estate planning is something everyone should do. Each time we have a major life change (marriage, divorce, birth of child, new job, etc.) we should reevaluate our estate plan to ensure it meets our needs. Unfortunately, few of us like to think about death or what will happen to our assets after we are gone.
We all eventually grow elderly, however, and the need for a solid estate plan becomes acute. The key documents that every elderly person needs include a Durable Power of Attorney ("durable" so it will be effective even after disability), a Power of Attorney for Health Care, a Living Will (also called an Advanced Medical Directive), and a Will.
You can read more about the purposes for each document at the links above. Seniors are far more likely to actually use (and thus need) one or more of these documents due to ill health, disability or the end of life. Without the right documents in place, your loved ones might have to go through the courts to obtain power and authorization that could have otherwise been provided by a Power of Attorney or Living Will. Court proceedings are time consuming and expensive endeavors, with unpredictable outcomes. Having essential legal documents in place avoids the potential headaches of the court system.
Older folks also have some unique estate planning advantages. Often, they are more financially stable than younger people. They have already raised their children, paid for college, paid off their house, cars, etc. Also, they have already navigated much of life and do not fear the future. The elderly are generally in a better position to begin letting go of their assets and start directing them toward people and causes they support. They can think seriously about what kind of legacy they want to leave behind.
If the elderly person is wealthy and anticipates leaving assets subject to estate tax, he or she should consider the advantages of gifting some assets to family or charity. This might make it possible to avoid both estate tax and gift tax on substantial assets.
Of course, we always advise that estate planning is best done with the advice of a good, local estate planning attorney.
See Medicaid Questions.
Here is an article about Estate Planning Consideration For The Disabled.
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