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What estate planning concerns are crucial as retirement nears?

On Behalf of | Jan 6, 2023 | Estate Planning |

It is common practice for younger professionals to create estate plans after they get married, have children or buy a home. Some people put off estate planning until they start thinking about retirement. Others who already have documents in place will want to start reviewing and expanding their existing estate plan as they near retirement age.

There are different issues that you need to address in your estate plan when you are about to leave the employment world to live on your existing assets and retirement savings. What considerations will you need to factor into your new estate plan or your updates to your existing documents as you start thinking about retirement?

Reflect on your medical needs as you age

Most retiring adults expect Medicare to provide them with the majority of their healthcare coverage needs. However, quite a few older adults will also eventually require Medicaid benefits to supplement what Medicare will provide.

Medicaid will pay for nursing home care or the help of a nurse in your house a few days a week as you age and become more dependent on the support of others. Qualifying for Medicaid at the last minute can be a challenge and may leave you struggling to cover penalties or ineligible for benefits. Advance planning, including transferring certain property into a trust you to quickly get benefits later when they become necessary.

Identify if you have vulnerable assets

The process of planning to protect your property from creditor claims often dovetails nicely with the Medicaid planning process. Moving certain property, like your financial accounts and real estate, into a trust will make it harder for creditors to try to claim those assets if they take you to court.

Unexpected expenses and other financial challenges during your retirement years could potentially lead to a lawsuit that puts your financial resources or home at risk of creditor claims. Protecting those assets so that you can continue to rely on them and pass them on to your children will be very important.

Consider the possibility of guardianship

No one wants to think about a future that may involve significant health issues and cognitive decline, but that is the reality for many older adults. If you don’t plan before you start experiencing age-related health issues, someone could take you to court to seek a guardianship that will grant them control over your health care, your resources and your daily life.

Advance planning, including the creation of durable powers of attorney, will allow you to name someone that you trust to support you when you can no longer act in your own best interests because of health issues.

Some people have other concerns as they plan for their golden years, and it is important for you to identify what you consider your top priorities as you age and your own biggest risks. Committing to estate planning before you actually retire can help you avoid many of the challenges that people experience as they age.