People thinking about estate planning often act out of concern for their loved ones. They create a will so that they control who becomes their children’s guardian if they die. They provide clear instructions for distributing their property to protect their closest loved ones.
Those are admirable reasons to establish an estate plan, but they are far from the only reasons that people may need to begin estate planning or revisit their documents. Those preparing for retirement often decide to put together estate planning documents as part of the preparation process.
Why do older adults preparing for their golden years often benefit from establishing estate plans?
The protection of vulnerable assets
Living on a fixed income during retirement means being somewhat financially vulnerable. Unexpected medical expenses or a surge in household costs might lead to collection efforts or lawsuits. Assets ranging from vehicles and bank accounts to real property could be at risk during retirement. Estate planning can potentially involve asset protection planning, which helps reduce the likelihood of lawsuits or probate proceedings resulting in outside parties taking ownership of major resources.
The need to cover care costs
Medicare is an important source of support for retired adults. However, there are many limits to Medicare coverage. Those who need more extensive support may eventually need to apply for Medicaid. When they do, five years of their financial records are subject to scrutiny. They may have to cover many months of their own care before Medicaid benefits start assisting them. As if that weren’t concerning enough, Medicaid can also bring claims against their estate after they die. Prior planning allows people to qualify for Medicaid without risking their legacy by doing so.
Concerns about incapacity
Even those who are perfectly healthy now may recognize that their health could decline as they age. Other people could sometimes try to gain legal control over an older adult’s daily life or their financial resources. Creating durable powers of attorney can protect people from scenarios in which they are at risk of involuntary guardianship later in life. The right documents can allow someone to name an individual they trust to manage their affairs if they become incapable of handling them on their own.
Estate planning can protect those preparing for retirement who need to take certain steps before they leave their jobs. Proper advance planning can be as much about the protection of a testator as it is about the protection of their loved ones.