Individuals can (hopefully) spend retirement or their golden years pursuing passion projects and connecting with the people that matter the most to them instead of devoting their lives to their careers. Retirement is, therefore, a time when people may start to slow down and focus on what really matters the most in life.
Oftentimes, those adjustments also make it apparent that either engaging in estate planning for the first time or updating an existing plan is necessary. Frequently, those preparing for retirement or adjusting to the changes inspired by the end of their full-time employment decide to sit down and draft or supplement their comprehensive estate plans. There are a few estate planning moves that are particularly important for those preparing for retirement and contemplating what the future holds.
Planning a personal legacy
If someone dies without a will, state law ultimately determines who inherits their property. Spouses will receive a significant portion of someone’s assets, and their children will also have strong inheritance rights. Those who would like to leave assets for their grandchildren rather than their children or for a charitable cause absolutely need to put those wishes in writing if they hope to leave behind a particular legacy. Wills and trusts are often key to the creation of a meaningful legacy when someone dies.
Preparing for a decline in health
The best-case scenario during one’s golden years will involve someone staying healthy and alert until the very end of their life. However, many people experience debilitating medical conditions and cognitive decline as they age. They may lose not only the testamentary capacity to create an estate plan but also the authority to manage their own finances and health decisions. Durable powers of attorney and advance directives allow someone who might become incapacitated as they age to retain control over their personal resources and healthcare.
Planning for financial challenges
Living on a fixed income during retirement often means that people have to alter their standard of living. They may also end up struggling to make ends meet if they require more support than they anticipated when planning for retirement. In-home nursing care or space in a nursing room can cost far more than what someone has set aside. Therefore, people need to plan for covering the cost of long-term care, which may include setting aside more resources or planning to be able to qualify for Medicaid benefits when the time comes.
Recognizing that the retirement years create an entirely new set of needs for older adults may benefit those who want to put together an estate plan that reflect their circumstances for their protection and peace of mind as they age.