When most people plan for their senior years, they mostly think about a Will that specifies how their assets will be distributed upon their death. But there are other things to think about as well, such as what will happen if you have a stroke, develop a serious illness or become incapacitated? What should you or your loved ones have in place in those circumstances?
It is extremely important to consider and plan for serious illness, not just death. While we are living longer, that doesn’t always mean we are living healthier. Stroke, complications from diabetes or osteoporosis can lead to nursing home placement. A legal plan must be established when a person is healthy so that a difficult situation doesn’t become more difficult when illness or incapacitation occur.
Here are some suggestions for how you can plan ahead for serious illness:
Have a Last Will and Testament
It sounds obvious, but many people don’t do this. Most people think that the state will automatically allow a spouse to inherit their estate. Not so. No matter what you want done with your assets after you die, it is imperative that you consult an attorney and put your wishes in writing. Doing that while you are still alive will save your family from a lot of heartache and frustration after your death.
Have a Living Will and Financial Power of Attorney
A Living Will is a document that states a person’s wishes for end-of-life medical care in the event that the person can’t communicate his or her wishes. A Financial Power of Attorney is a document that appoints someone to act on your behalf with respect to your financial obligations. This may include providing access to bank accounts, signing tax returns, selling stocks, etc. Having these documents ready before you become seriously ill will help avoid the extra expense and the possibility of having a court appoint a guardian or conservator, who may be stranger to you and your family.
Gift property or assets such as stocks via a legal and/or financial plan
If you think you can transfer your stocks to your adult child or sell your house and have the proceeds go to a grandchild without any consequences, you are mistaken. Gifting property or assets without a legal plan can lead to major tax consequences, Medicaid disqualification or even personal impoverishment due to bankruptcy or divorce of the person to whom you gifted the asset(s). All of these problems can be avoided by obtaining proper legal and financial advice before any transfers take place.
It isn’t just death that you need to prepare for; you must prepare for other possibilities including incapacitation due to serious illness or health complications. Consulting with an attorney or financial advisor while you are healthy will help to avoid heartache and uncertainty should a serious illness occur.