On the surface, it can seem as though estate planning is all about postmortem asset transfers. However, it is wise to see a holistic picture. Yes, you should address the events that will take place after your passing, but you should also brace yourself for end-of-life issues.
Aging and Alzheimer’s Disease
According to the United States Census Bureau, the segment of the population that was between 85 and 94 years of age grew faster than any other between the last two censuses. The Social Security Administration tells us that the life expectancy for a 67-year-old American is at least 85 years, depending on the gender of the individual in question.
When you combine these aging statistics with the fact that approximately four out of every 10 people that are 85 years of age and older have contracted Alzheimer’s disease, a clear picture emerges.
If you live long enough to collect your full Social Security benefit, it is likely that you will experience life as an octogenarian, and Alzheimer’s is quite common among the oldest old. Add in the fact that this disease is not the only cause of incapacitation, and you can see why everyone should be concerned about this eventuality.
Living Trust
When you are planning your estate, you should take possible incapacity into account. This can be done through the utilization of a revocable living trust as the centerpiece of your estate plan.
You do not have to worry about losing control of the assets that you convey into the trust while you are living, because you could act as the trustee and the beneficiary. In the trust declaration, you would name successors to assume these roles after your passing and in the event of your incapacity.
There are a number of benefits to be gained through the creation of a living trust, but we will focus on the one that is relevant to this topic. You can name a disability trustee to administer the trust if you become incapacitated at some point in time.
It could be the same individual or entity that will serve as the trustee after you are gone, but this is not a requirement. In this manner, there would be a hand-picked financial decision maker in place to spring into action if it ever becomes necessary.
Advance Directives for Health Care
In addition to the monetary side of the equation, you should state your wishes with regard to medical decision-making. This is done through the execution of documents called advance directives for health care.
One of them is a living will, and this type of will has nothing to do with money. With this document, you state your preferences regarding the utilization of life-sustaining measures like artificial respiration, resuscitation, artificial hydration and nutrition, etc.
This is a very personal matter, and it is not something that anyone should make for another person, so this is a very important piece to the puzzle.
Medical scenarios that do not revolve around the use of life support may present themselves. To account for this, you can include another directive called a health care proxy. With this device, you name an agent that would be empowered to make decisions on your behalf under these circumstances.
Obviously, to do this effectively, the agent must have access to your medical records. To facilitate this, you should include a HIPAA release form. This would give the medical community the legal green light to share the information with anyone that is named in the document.
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One of them is our meticulously prepared worksheet. We encourage you to gain access to your copy and take a little bit of time to go through it, because it will definitely give you some important insight into the process. To do just that, visit our estate planning worksheet page and follow the simple instructions.
