Between work and family, our busy lives often leave little time to focus on our own personal affairs, especially those related to our aging. I cannot emphasize enough, however, the importance of stepping back to assess whether you have adequately prepared yourself for the elder years before they are upon you.
The following are my suggestions for your consideration. These tips focus primarily on gathering, organizing and updating documents that will be particularly important for the years ahead. A second post will offer advise on what to do once these documents are in order.
1.) Physically organize your affairs. Locate and organize into separate folders/binders all of the most important legal documents you have executed, such as your original Last Will and Testament, trust(s), advanced directives (Powers of Attorney, Health Care Proxies, etc.), deeds to your properties, mortgages and notes, insurance policies (life, health, disability, home, long-term care, malpractice), bank and investment records, income tax returns, passports, birth certificates and military discharge records, etc. While organizing these documents will be a time consuming process, it allows you to revisit many matters you may have not paid attention to for a number of years. Once you have physically organized these documents, I would suggest that you let your spouse and/or loved ones know where they are located.
2.) Review and update your existing last wills, trusts and advance directives. Ensure these documents are up to date and reflect your present financial circumstances and wishes. The Last Will you prepared when you were newly married with minor children may not be reflective of your current state of affairs and/or wishes. For example, your existing Last Will and the titling of your assets may not allow for appropriate estate tax planning on your death or the death of your spouse.
An extremely important document to have as one ages (which is often not properly drafted) is the Durable Power of Attorney (POA). It is most important that the POA be Durable (survive your subsequent incapacity) and be sufficiently broad to allow the agent to take all steps necessary to protect and preserve your assets in the event of your incapacity. You should, in my opinion, have a Durable Power of Attorney with as many powers (including broad gifting powers) as humanly possible. Many Guardianship proceedings would be avoided in their entirety if a sufficiently broad POA existed.
3.) Organize and review all existing insurance policies. You may know that you have purchased life, disability and/or long-term care insurance, but it may have been years since you assessed the adequacy of the coverage. From an estate tax and planning perspective, it may be wise to have the policy owned by an irrevocable life insurance trust so that it is not part of your taxable estate. Generally, most insurance professionals are willing to provide a no cost review of one’s existing policies.
4.) Inventory, organize and keep at least eight years of your financial and bank records. Many families are unsure and unable to locate all of the bank and financial accounts their loved ones have at a time of illness or death. Additionally, if you need to apply for Medicaid to cover your possible stay in a nursing home, you will need the last five years of all bank and investment account statements and records.
