Some people establish estate plans when they get married. Becoming a parent is another common trigger for adults to draft wills and other estate planning documents. Sometimes, even those with dependent family members or valuable resources could procrastinate about estate planning.
Instead of creating plans as early as possible and then updating them when circumstances change, they wait as long as they can. Some people eventually die without an estate plan in place. Others may realize they need to create documents as retirement looms large on the horizon. As a professional begins preparing to transition away from full-time employment, they have to think about the future carefully.
What specific estate planning actions may prove beneficial for those on the verge of retirement?
Asset protection planning
Many people worry about living on a fixed income. They don’t want creditors to take legal action against them while they live on a fixed income. They may also worry about preserving resources for their intended beneficiaries after they die. Asset protection planning may involve creating a trust or changing how the testator holds key assets to protect them from lawsuits.
Long-term care planning
Many older adults think about what may happen as their health changes later in life. They may need to plan in advance for medical decline, especially if major medical issues run in their families. Vulnerable older adults who can no longer live completely independently require long-term care services that Medicare does not cover. Older adults often need to plan well in advance to qualify for Medicaid benefits quickly if their health changes. Advance planning prior to retirement can help people avoid major transfers during the five-year lookback period that could result in a penalty.
Establishing advance directives
Testators may want to consider their medical wishes. They may want to draft an advance directive explaining their medical preferences in case they become incapacitated. Many aging adults decide to draft durable powers of attorney. These documents empower a chosen individual to oversee medical or financial matters when someone becomes permanently incapacitated. They can avoid a scenario in which family members or professional caregivers use the courts to eliminate their autonomy by imposing a guardianship.
The people preparing for retirement often need to review their finances and think about the types of support they may need as they age, and that’s okay. Establishing new estate planning paperwork or revising existing documents can help people obtain support when they need it later in life.
