estate planning

Estate Planning During a Pandemic – Quit Stalling

The COVID-19 pandemic isn’t going away anytime soon. This global health crisis has proved especially dangerous for older Americans, a stark reminder to ensure your affairs are in order. Here is an overview of what you need to cover.

The coronavirus is taking a toll on much more than our finances; our physical and mental health are also a concern. Most people likely know someone who has been affected by the coronavirus. and they’re worried. Appropriately planning for your health care and financial needs in an estate plan can provide much-needed peace of mind.

Health Care components of an Estate Plan

Advance Health Care Directive

Every adult needs an advance health care directive, and it becomes even more important as we grow older and experience more health issues. An advance health care directive is a written plan so your wishes are known if a time comes when you cannot speak for yourself.

Start by thinking about different treatments you do or do not want in a medical emergency. Consider talking with your doctor about your family medical history and how your current health conditions might influence your health in the future. Your wishes need to be in writing, and the document should be updated as your health changes.

Review your advance health care directive with your doctor and the person you are naming as your health care proxy to be sure all forms are filled out correctly. Give each party a copy, and keep a record of who has these forms.

Keep your completed documents in a safe but easily accessible place, such as a desk drawer.  You might also consider carrying a card that states you have directives and where they can be found.

Health Care Power of Attorney

A health care power of attorney is a legal document naming a health care proxy. This is someone who can review your medical records and make decisions, such as how and where you should be treated. This person would come into play if you were incapacitated and unable to make medical decisions for yourself.

Choose your health care proxy carefully. This person will potentially have to make difficult decisions, so a close family friend or relative (who is not a spouse or child) may be a good choice.

Living Will

A living will is different from a will. It’s a type of advance health care directive that specifically deals with end-of-life decisions for people who are terminally ill or permanently unconscious. This legal document covers specific medical treatments, such as resuscitation, mechanical ventilation, pain management, tube feeding and organ and tissue donation. When writing a living will, think about your values. It’s also important to talk to your doctor, your health care proxy and your family and friends about your decisions.

Financial Components of an Estate Plan

Financial Power of Attorney

By creating a financial power of attorney, you can choose someone to help with your finances if you become incapacitated and unable to do so. You can choose how much control your power of attorney will have, like accessing accounts, selling stock and managing real estate. Choose someone you trust completely, such as a spouse, an adult child, a close friend or sibling.

Trusts

You can set up a qualified trust to protect your assets as you pass them down to your heirs. If your children or grandchildren aren’t old enough or mature enough to handle their inheritance, you can set up a trust that gives them a small amount of money each year, increasing that amount as they get older. You can also leave money specifically for paying down an adult child’s mortgage, wedding expenses or student loans. If charitable giving is a priority of yours in retirement, a charitable trust can protect your assets until they are distributed to the charities of your choosing.

Beneficiaries

One of the biggest mistakes people make is forgetting to update their plans. Life insurance policies, bank and brokerage accounts and retirement plans typically all have beneficiary forms, and these forms typically override your will. You should update all of these forms, along with your estate plan, every couple of years and after every major life change, including marriages, divorces, deaths or births.

Now more than ever, it’s important you discuss with your loved ones your health care wishes and how you wish to pass on your assets. Your loved ones need to know if you have a will or trust, who is listed as beneficiaries on your accounts and who the attorney is who created the plan. Your family should also be introduced to your financial adviser. We enjoy these meetings where we get to know our clients’ kids and grandkids. Those you trust should also know where you keep your important documents. Also, make sure you are reviewing and updating your estate plan when you review your retirement plan each year or every six months.

 Estate planning is a key piece of a comprehensive retirement plan.

​​This material has been provided for informational purposes only and is not intended to provide any specific medical or legal advice or provide the basis for any financial decisions. Be sure to speak with qualified professionals before making any decisions about your personal situation.

About the Author

Tony Drake, CFP®, Investment Advisor Representative

Founder & CEO, Drake and Associates

Tony Drake is a CERTIFIED FINANCIAL PLANNER™and the founder and CEO of Drake & Associates in Waukesha, Wis. Tony is an Investment Adviser Representative and has helped clients prepare for retirement for more than a decade. He hosts The Retirement Ready Radio Show on WTMJ Radio each week and is featured regularly on TV stations in Milwaukee. Tony is passionate about building strong relationships with his clients so he can help them build a strong plan for their retirement.

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