As elder law attorneys our clients are usually 50 years of age or wiser (older). Although no two clients are the same, we find that beginning at age 50 there are some important legal decisions that we all should consider. Here are five:
First – Put two important advance directive documents in place. With the health care advance directive document you get to appoint a trusted person who can make health care decisions and end-of-life decisions for you, if you are unable. With the durable financial power of attorney document you get to appoint a trusted person to make personal, legal and financial decisions for you, if you are unable. Without these documents in place your loved ones or family would have to go to probate court to be appointed guardian and conservator.
Second – Gain a full understanding of the assets you have acquired over the years, such as life insurance policies, annuities, retirement accounts, long term care insurance policies, and other investments. Make sure the accounts are titled properly with proper beneficiary designations so as to assure the easy and proper transfer of the assets to the intended survivor.
Third – Now that the children are grown and have (hopefully) started their own productive and self-sustained lives, consider their lifestyle as potential beneficiaries of your estate. Is the child, now adult, capable of handling an outright inheritance or is a trust necessary to protect the assets from the child as well as creditors and others? Or, if a child is challenged mentally or physically and receiving government benefits, perhaps a supplemental needs trust is necessary to protect the inheritance and the government benefits. Such action assures a greater quality of life for the special needs person.
Fourth – If this marriage is your or your spouse’s second marriage, with children and assets from a prior marriage, be sure to seek legal counsel experienced in such “blended family planning”. With open and full discussion, detailed advanced planning can result in a comprehensive, conflict-free, and probate-free estate plan accomplishing the goals of both families.
Fifth – Don’t let your IRA become an IOU to the IRS. An IRA or other qualified retirement account asset is in “tax deferred” status, with taxes due only at the time of withdrawal. Without IRS approval, withdrawals before age 59½ result in a tax and a 10% penalty. You must begin withdrawals at age 70½. Failure to take this Minimum Required Distribution results in a tax and a 50% penalty. With proper beneficiary designations you can assure extended tax deferral status for your spouse, with a “roll over” IRA, and to your children with an “inherited” IRA. You should always name a primary beneficiary and a contingent beneficiary.
Put a long-term care and estate plan in place. Protect your independence, your family, your assets, and your peace of mind with proper advanced planning. Take care of your personal, legal and financial affairs, then go home and take care of yourself. The theme of this year’s Older American Celebrations is “engage at any age”. We must stay active, stay involved socially, physically, and mentally. Be well at any age.