Early Planning For Retirement And Inheritance

Question: We are nearing retirement, and are becoming concerned about our future, and the future of our children.

Going through our books and records in preparation of our 2016 tax returns, we began to wonder what we should be doing now to make sure that there will be no surprises that can affect our future or the inheritance of our children.

Do you have any comments?

Answer: I could write a book on this subject. Too many of us live active lives, do not concern ourselves with future problems and basically are living on a “day-to-day” basis.

But if we take the time to think about these matters, and if we look around our house, we begin to realize that some careful planning is needed for the future.

Here are but a few ideas for you to consider. Clearly, you should discuss all of these matters with your family and your legal, tax and financial advisers.

Do you have adequate life insurance coverage? Many of us took out insurance policies years ago, and often have not reviewed the coverage to make sure it is adequate for the needs of our survivors.

More importantly, where beneficiaries change (because of divorce or death) the policy must be corrected to reflect the appropriate beneficiary. In recent years, insurance policies have changed, and the tax laws have changed. What you have obtained ten or fifteen years ago may not fit your current needs.

Indeed, some people begin to realize that as they get older, and their children become self-sufficient, the level of insurance can in fact be reduced. You should discuss all of these matters with your insurance adviser.

Is your house insurance adequate? Many insurance policies have automatic increase provisions to periodically boost the coverage.

Make sure the replacement value of your house meets industry standards, so you will not suffer a financial loss if your house is destroyed.

Do you have a Last Will and Testament? If not, you are strongly advised to give serious consideration to preparing one now.

And even if you have a Will, if it was written years ago, your legal and tax advisers must be consulted to make sure that the new tax laws will not adversely affect your Estate. With the new adminstration — and talk of serious tax reform — I recognize it is difficult to make decisions. However, don’t put your planning off; there is no guarantee that the tax laws will be changed in the foreseable future.

Additionally, you should consider signing Living Wills and Durable Powers of Attorney to cover situations where you may be in an accident and not able to handle your own affairs.

Indeed, the Supreme Court of the United States has made it clear that if you are medically diagnosed as totally “brain dead,” and you want the doctor to “pull the plug,” you must make your intentions quite clear — preferably in writing — so as to give guidance to the doctors. This is known as a “Living Will” or a “Declaration,” and will be necessary if you have to go into a hospital.

If you do not want to be artificially maintained by life-support equipment in the event of an accident, you should prepare a Living Will declaring your intentions while you are able to do so.

Are titles to the family assets in a form acceptable to you for inheritance and tax purposes? You should explore with your advisers the pros and cons of such things as (1) creating a revocable trust, or (2) preparing a “deed on death“. Many states have now adopted laws that allow you to prepare and file a deed that does not take effect until you die; but you have the abolute right to cancel the deed at any time during your lifetime.

You must also consider what will happen when your spouse dies. For every document that you enter into, always have an alternative person designated, just in case the person you do authorize to take certain actions is not able nor willing to assume that obligation.

Finally, if you die or are seriously incapacitated, will your family be able to find all of your legal documents and papers? Often, one party in the household handles the books and records. The other spouse has no idea whatsoever where things are.

Both of you should sit down one weekend and make a comprehensive list of your assets and liabilities. If you have stock certificates, certificates of deposit, life insurance policies, or other valuable documents, make a list where they are, so your family will not have to suffer more under the circumstances. You should also make a list of people who should be contacted in the event of a problem.

This list should include at the very least the names and addresses of your attorney, accountant, insurance adviser, executor of your Will and administrators of any pension plans.

Life has become quite complex. If you do not put your own “house in order,” the courts and the tax authorities will make decisions on your behalf (or on behalf of the Estate) which may not be in anyone’s best interest. Careful planning now can save considerable aggravation and frustration for your family in the long run.

Written by Benny L. Kass

Aging in Place – What Exactly Is It and Can You Do It?

I was recently on the Charlotte Today Show where i spoke about aging in place. Here is a taste for what we covered.

  1. What exactly is aging in place? The goal of aging in place is to help seniors live in the residence of their choice, for as long as they are able and get any help they need for as long as they can. That sounds kind of simple but there is more to it. It is about maintaining and/or improving quality of life. In order to do that, you need a good plan that focuses on your quality of life. This plan should be maintained over time as your situation changes just like you review your will from time to time. Aging in place is a choice and it not relegated to “old” people. We can all plan for aging in place sooner in life. A couple with a growing family who moves from the started house to a bigger one can imagine a day when the kids are grown and wonder if they could grow old in that house.
  2. So I imagine that it starts with your physical environment, your home. Yes. And there are two things to consider. Can you remodel your home so it is safe and efficient for aging in place or do you need to consider a new home? There are numerous areas to consider – Kitchen, Bathroom, Laundry Room, Bedroom, Home Exterior, Garage, Carport & Parking, Common Areas. So let’s pick one, the bathroom, because that is an area where falls can easily happen. Plus at 59 and 62 respectively, my wife and I just had our bath remodeled with aging in place in mind. The ideal situation is to have plenty of clear space to accommodate someone in a wheelchair around the toilet, bathtub or shower stalls. Having the toilet at the proper height can make an incredible difference in the comfort and safety of your bathroom. Replace the toilet with one that is the proper height or buy a seat extender. Installing grab bars can dramatically and economically increase safety in the bathroom. You can find stylish ones that don’t scream nursing home! Shower seats and an anti-slip coating to the tub floor are reasonably priced options. There are also a wide variety of walk-in tubs on the market. The most accessible option is a roll-in shower. An adjustable shower head is a great way to add accessibility to a bathroom. For help, there are a growing number of contractors that have earned the Certified Aging in Place Specialist designation from the National Association of Home Builders. If all of this is too much then you should consider an independent senior living community that incorporates these features.
  3. Health care is probably a major priority for older people. How can they plan so that they have access to health care when they need it? First the obvious. Keep yourself in the best shape you can. Really. I have seen too many people in elder care facilities where age did not catch up. They did not keep up. You can’t live in your own house if you have major health problems. Many senior communities are built with access to doctors and hospital locations nearby so that is an advantage of buying a home. If not, consider. Are there adequate health care facilities nearby? Do physician’s offices offer in-home visits or remote health care? Do you have proper transportation to and from appointments should you not be able to drive? Have you made your health care wishes known and do you have someone appointed to speak for you should you become incapacitated?
  4. What other services should be close by to age in place properly? Even with the best house for aging in place, if community supports are not nearby, it makes it harder to stay in your home. Faith-based institutions are important to many people. How close are they? Do they have transport. Can you find centers that provide for social activities, friendships or volunteer opportunities? What transport options are available? Is retail and restaurant establishments close by? Can you access home maintenance people delivery services for groceries, shopping services?
  5. What else should we consider? We talked about spelling out your health care wishes. You also have to plan for how you will pay for your long-term care needs so securing the services of a good and ethical financial advisor is key. Plan early.