Reaching retirement is a great time to create or revise an estate plan, but there are certain pitfalls you should be aware of as you go about it. Let’s explore some of the most common mistakes people make under these circumstances, and how an experienced estate planning attorney can help you avoid them.
Mistake #1: Waiting Too Long to Update or Create an Estate Plan
Delaying estate planning can lead to confusion or challenges for a retiree’s family in the event that the retiree passes away or requires long-term care. Furthermore, changing life circumstances require people to update their estate planning documents regularly. Without an up-to-date estate plan, family members may struggle to secure long-term care for a loved one, handle their medical and financial affairs, and administer their estate after their passing.
Mistake #2: Ignoring Long-Term Care and Healthcare Decisions
Many people require long-term care during their retirement, including home health services or nursing home care. However, such care can be expensive, quickly draining the retiree’s retirement savings if they do not have a life care plan that coordinates medical, financial, and legal decision-making. A life care plan can include advance healthcare directives, living wills, and healthcare proxies that ensure a retiree has their wishes or preferences regarding healthcare or end-of-life care carried out.
Mistake #3: Failing to Plan for Incapacity
Age can lead to sudden illnesses or cognitive decline that may require long-term care and in-depth support from family members. Without putting life care planning strategies in place, a retiree’s family may have to pursue guardianship or other court involvement to get them the care and support they need. A life care plan may include durable powers of attorney, healthcare directives, and Medicaid trusts to ensure loved ones can handle an incapacitated individual’s affairs and secure the financial resources needed for long-term care.
Mistake #4: Overlooking Coordination Between Financial and Legal Plans
Many retirees have spent a lifetime acquiring assets, including retirement accounts, pensions, life insurance, and investments. These assets coordinate with estate planning documents in complex ways, and retirees should be mindful of that fact. For example, a will may include a bequest of life insurance benefits or pension account balances, but the insurance policy or pension account may have a beneficiary designation identifying a different party to inherit those assets. Furthermore, people may not consider how their life care plan aligns with their financial planning, which can leave them without the resources to afford long-term care.
Mistake #5: Not Communicating the Plan with Loved Ones
Failing to include family members in the estate planning process can lead to conflicts down the road. Without clear instructions, loved ones may be left to argue among themselves over what the retiree would want or how to go about providing for them.
Those who create or revise estate plans near retirement should have open discussions with loved ones about financial management, healthcare preferences, and end-of-life choices. Furthermore, including family members in life care planning can help them understand their roles and responsibilities in the event that the retiree suddenly becomes incapacitated.
Contact an Estate Planning Lawyer Today
As one of life’s final major milestones, an impending retirement is an excellent time to revise or establish an estate plan that clarifies your wishes, provides for your long-term needs, and secures your legacy. However, creating an estate plan without the advice and assistance of a lawyer can lead to mistakes that put all that at risk. Contact Kreisher Marshall & Associates, LLC today for a confidential consultation with an estate planning attorney in Central Pennsylvania, and let us support your estate planning as you approach retirement age.