When most people think of “getting their (legal) affairs in order” for retirement, they typically “plan” to live a leisurely retirement and then pass away quickly. The plan details call for stretching out the IRA and having enough money to maintain their lifestyle through retirement. The plan will then pay as little as possible in taxes so the heirs can get their maximum inheritance. I call this the “death and taxes” approach to what most attorneys call “estate planning.”
But, life does not go according to plan. And, that is what elder law is about. It adds to traditional planning the ability to successfully deal with the challenges of aging. It is surprising how the vast majority of people are not prepared.
The Reverend Billy Graham wrote in his book “Nearing Home” that he was prepared to die, but he was not prepared for growing old. Growing old is a challenge. Art Linkletter said it: “Aging is not for sissies.”
Planning for death and taxes leaves many people unprepared for the reality of the later years of retirement.
Let’s face it. In spite of our best efforts to stay healthy and active “life happens.” I had a neighbor who was an active gardener in her early 80’s. Her whole yard was a blooming delight. But then the arthritic pain got to the point that one time she had a bad fall. After recovering from the hip and shoulder operations, she did not recover her former active life. The kitchen table talk came to the judgment – “she’s an old lady now.”
There comes a time when we have to admit that we are aging. Like an old mechanic said, “when she gets old, parts break.” The ol’ heart, knees and hips don’t last forever! But getting old does not mean you can’t take care of business. You’ve got challenges, but one of the worst is that people (sometimes your own children!) want to treat you like a child.
You do have to take steps to preserve and protect your independence. The fundamental way to do it is through your powers of attorney and trusts. When these are tailored to your living situation, you will stay in control even if you are “incapacitated.”
Here are some of the ways we help you stay in control:
Perhaps the single most important legal document is the healthcare power of attorney. In our experience retirement changes because of a major medical event. It might be a broken hip, a heart attack, a stroke or diagnosis of dementia. These are all medical events and, as everybody knows, healthcare is getting more corporate and less personal every year. When was the last time anybody saw the family physician visit in the hospital? Now a hospital doctor is the team leader the physician group that will take care of you. You will not likely meet these doctors again.
Here are the components of the medical authority you need to grant:
You can name someone to take care of business while you cannot. This need can easily arise when you are fully healthy! Let’s say you are on your annual vacation and you get a call from home “the drunk down the block parked his car in your living room last night!” You don’t have to rush home. You can have your Power of Attorney Agent call the insurance company and the contractor.
Of course the power of attorney handles much more serious issues as well. Suppose your spouse is in a nursing home and you need to access his or her IRA. Unless you have been given authority by the wage earner you cannot. Being married is not enough. And, the authority must be expressly given. I have seen powers of attorney that failed to have retirement plan powers. If that were your case you could expect to pay the nursing home for three months and pay attorney fees and court costs to get an order from the probate court.
Many people think of a living trust as a way to avoid probate on death. They are surprised to learn that it can have a beneficial role in life care management. In this role the trust replaces the durable power of attorney for financial matters. In fact it is much easier to deal with some kinds of property such as investments and bank accounts with the trust as opposed to the power of attorney. The trust brings an additional advantage and that is control. By a power of attorney we give our agent permission to take care of business for us. With the trust we give our trustee instruction on what to do and the trustee must do it or be replaced. Of course, the power of attorney will be needed for matters that we do not own such as dealing with the IRS or a pension plan.
You can get more information on the above subjects on other pages and articles on our website. But why not just make an appointment and “get it done”? We’ll be happy to help you get safe and secure.