You should take a comprehensive approach when you are planning your estate. Yes, you want to make sure that your assets are transferred to your loved ones in the ideal manner. At the same time, you should also address eventualities that you may face toward the end of your life.
Anticipated Longevity
When you think about retirement, you probably envision relatively active years when you can travel, engage in leisure activities, and cross things off your bucket list. If you prepare yourself financially, you can enjoy your golden years to the fullest.
Enjoying your golden years is easy to contemplate. The next stage of life, however, is a little more difficult to wrap your head around.
There is a life expectancy tool on the Social Security Administration website. If you plug in the numbers to find out the life expectancy for someone turning 67 today, you may be a bit surprised.
A woman celebrating her 67th birthday would have a life expectancy of 87 years. For a man turning 67, it is 85 years. This is the full Social Security retirement age for people born in 1960 or any later year. If you think you will live long enough to receive your full benefit, statistically speaking, this is your expected longevity.
Clearly, life as an octogenarian can present certain challenges that you never had to face when you were a younger senior citizen.
Cognitive Impairment
We have all heard of Alzheimer’s disease. Its widespread nature, however, is a bit surprising. About 10 percent of all seniors have contracted the disease. Unfortunately the number goes up to 32 percent for people that are 85 years of age and older. These figures are provided by the Alzheimer’s Association.
This disease causes dementia, and people with cognitive impairment eventually become unable to handle their own affairs. Alzheimer’s is not the only cause of dementia, and dementia is not the only type of incapacity that can rob someone of their ability to communicate.
Adult Guardianship
If interested parties felt as though you were no longer capable of taking care of yourself, they could petition the court to appoint a guardian to act on your behalf. This is a necessary safeguard, but there are some drawbacks that can enter the picture.
Your family members may not all be on the same page. The person that is chosen may not be someone that you would have selected yourself when you were capable of communicating sound decisions.
Proactive Incapacity Planning
You can address this possibility in advance and prevent a guardianship if you execute the appropriate estate planning documents. You can record your preferences regarding the utilization of life support in a living will, which is also referred to as an advance directive for health care.
Another directive that is recommended is a durable power of attorney for health care. You use this document to name a representative to make medical decisions on your behalf. These would be choices that are not covered under the living will.
When it comes to financial decision-making, you can add a durable power of attorney for property. If you have a living trust, you could name a disability trustee that would step in to act as the administrator in the event of your incapacity.
Schedule a Consultation Today!
We are here to help if you would like to develop a holistic estate plan that includes an incapacity component. Call us today at 405-843-6100 to schedule a consultation appointment at our Oklahoma City estate planning office, or complete the contact form on this site if you would prefer to send us a message.
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.