For some adults, retirement is the first time that they truly consider estate planning. For others, preparing for retirement is a reason to review and update their existing estate plans. The needs of those at or near retirement age are different from the needs of younger testators.
Older adults can potentially remove guardian designations for their children who are now adults and make other modifications to their documents. Estate planning while preparing for retirement can help people enjoy their golden years with a greater sense of personal security.
What estate planning moves are often necessary as people begin planning for retirement?
The creation of living documents
Younger people establishing estate plans often focus on caring for their dependents or allocating their property if they die prematurely. Those preparing for retirement often need to think about the possibility of medical issues later in life. An estate plan can include living documents such as powers of attorney.
People can select agents or attorneys-in-fact to handle their affairs if they become incapacitated. They may even want to establish durable powers of attorney as a means of avoiding guardianship if they become permanently incapacitated. They could also establish advance directives providing clear instructions about their health care preferences.
Preparing for long-term care
Older adults on the cusp of retirement often need to address of the potential for long-term care expenses later in life. Medicare does not provide the comprehensive coverage people often require when their health declines, so they may need to apply for Medicaid benefits eventually. Advance planning makes it easier to qualify for Medicaid without risking a penalty and can limit the risk of estate recovery efforts after someone dies.
Preserving resources for a future legacy
Long-term care planning might also involve asset protection planning to protect resources from the possibility of creditor lawsuits when people live on a fixed income. They can make moves to keep certain assets out of probate court after they die to protect those resources from liquidation.
As a final note, updating testamentary instruments to reflect changing family circumstances and the acquisition or sale of different assets can also be an important move.
Establishing and updating estate planning documents when comparing for retirement can help people protect themselves and their loved ones. A thorough estate plan can help people to preserve their comfort throughout their golden years.