Caring.com conducts surveys each year on the estate planning preparedness of American adults. According to those surveys, just under 33 percent of American adults have wills or trusts in place. Caring.com has conducted these studies for a number of years, and the numbers continue to move in the wrong direction.
Curiously enough, 60 percent stated that they do believe estate planning is important – they just haven’t gotten around to it. They key reason appears to be that they do not know where to begin.
With this in mind, we will share a few basic facts to help you start.
Avoid DIY Planning/Look Past Simple Wills
First, avoid the do-it-yourself estate planning online products. The average person just does not have enough knowledge to avoid the problems that can occur.
You may also fall into the “trusts are only for the wealthy” trap. There are drawbacks and limitations with a will as your primary estate planning vehicle. A trust can be a far superior choice.
The revocable living trust is much more versatile than a will, and it can accomplish more objectives in a more efficient manner. It is wise to discuss your options with an estate planning attorney before you make any firm choices on your own.
Evaluate Your Retirement Expenditures
Predicting your retirement expenditures is not an exact science. However, you can certainly establish a general idea and consider possible outcomes.
At a minimum, long-term care costs must be considered. More than one third of seniors will spend the last portion of their lives in nursing homes, and these facilities are extremely expensive. Last year, the median annual cost for a private room in an Oklahoma City nursing home was $69,350. Note that Medicare does not pay for long-term care.
However, Medicaid is a government health insurance program that pays for living assistance, and certain estate planning strategies can help you gain eligibility. You may want to explore this possibility if you have concerns.
People often reside in nursing homes because they can no longer make sound decisions. However, Alzheimer’s and other cognitive diseases strike people that are still living at home. In addition, a person can be incapacitated due to non-cognitive physical issues.
To prepare for these potential problems, you should execute a durable power of attorney for health care. This document allows you to appoint someone you trust to make medical decisions on your behalf. In addition, you may execute a durable property power of attorney for financial decision-making.
Note also that if you have a trust, you may name a disability trustee to administer the trust in the event of your incapacity.
Attend a Free Webinar!
We will hold a series of webinars over the coming weeks that will cover estate planning and elder law topics to help you protect your legacy. There is no charge for this education.
Please visit our webinar page and follow the instructions to register.
Need Help Now?
If you are ready to establish your estate plan, we are here to help.
Please send us a message to request a consultation appointment at our Oklahoma City estate planning office. We can also be reached at 405-843-6100.