Though almost everyone has an estate of some kind, only one-third of American adults have filled out estate planning documents.
This is the first step toward providing for beneficiaries and allocating assets, so it’s important that estate planning is somewhere on your priority list. Here, we’ll discuss the nitty-gritty of estate planning for seniors.
Whether you’re an older adult or someone helping them create a will, read on for more information about asset protection.
What Is Estate Planning?
At its core, estate planning for seniors creates a plan for what will happen to the older adult’s assets after they pass away.
This includes designating beneficiaries to receive property and other assets. It also means deciding who will get money in bank accounts and who will make financial decisions regarding the estate.
Estate planning also includes making decisions for seniors’ end-of-life events. They’ll be able to decide who makes medical decisions for them if they’re unable to do so. Seniors can also draft up their funeral and burial wishes.
Estate planning is a legal process, and the documents involved in this plan are legally binding. Because of this, it’s critical to consult with an estate planning lawyer when filling out and signing forms. Attorneys cross your T’s and dot your I’s to ensure that your forms are ironclad contracts.
The Importance of Estate Planning for Seniors
Seniors should care about estate planning because it lets them decide where their assets will go in the future. This peace of mind allows them control over their money and property even after they pass on.
The senior financial planning and asset protection strategies that come with estate planning ensure that their last wishes will come to fruition.
Beyond that, though, thoroughly planning their estate is a gift that older adults can provide for their families.
Without legally binding documents, many families:
- Are slapped with heavy taxes as assets move around
- Face conflict between family members as they dispute over assets
- Argue over who makes decisions on behalf of an incapacitated senior
- Make decisions that their late loved one would disagree with
- Experience guilt over having disputes and conflicts while grieving
Estate planning ensures that seniors’ families can stay united in the worst of times. They won’t need to argue about asset distribution, taxes, and finances. Instead, they can work together to execute their loved one’s wishes and feel closer to one another because of this teamwork.
The Components of Estate Planning
Hiring an estate attorney is the first step toward successful senior estate planning. These lawyers work with their clients to:
- Figure out senior’s estate planning needs
- Fill out legal forms completely and accurately
- Word documents appropriately so there’s no room for interpretation
- Offer guidance on protecting assets and money
- Choose an executor of the will to aid in asset distribution
There are several tasks that seniors should engage in for thorough estate planning, and lawyers can help with them all by providing elder law advice.
Designating Beneficiaries
The first step of estate planning is for seniors to decide on their beneficiaries. Beneficiaries are the people who receive part of an estate when the owner passes away.
Seniors should write out:
- What significant assets need to be distributed to beneficiaries
- The names of all beneficiaries
- What assets each of these people should receive
Information about beneficiaries should go in the testamentary will.
Writing Wills
Wills are legal documents that transfer assets to beneficiaries after the death of the estate owner.
Naming an executor is step one of drafting a will. This person will ensure that the wishes you write out are followed to a T. Usually, the executor of a will is a surviving spouse or responsible adult child.
Wills should also include:
- The names of all beneficiaries and what asset each beneficiary should receive after the owner’s death
- If any money should go to charity (and what charities it should go to)
- A list of your debts, including mortgages/loans/credit card debt
Creating Trusts
Trusts are entities that seniors can set up to transfer property to a trustee. This trustee will hold onto the asset until a beneficiary can claim it.
The main types of trusts are:
- Revocable living trusts that let seniors keep moving assets around until their time of death
- Irrevocable living trusts that force seniors to relinquish their rights to the assets in the trust after it’s formed
- Spendthrift trusts that let heirs get allotted sums after they meet certain conditions that you’ve decided on when making the trust
Trusts are essential parts of naming minor children as beneficiaries. However, seniors should set up trusts for their adult beneficiaries, too.
This is because trusts avoid the probate process that forces a court to oversee asset distribution.
Assets in a trust also may not be subject to the same taxes as other assets. This can save money for those who inherit.
Deciding on Power of Attorney
Choosing a financial power of attorney is another critical part of estate planning. When a senior isn’t able to make financial decisions for themselves, the designated power of attorney makes those choices.
Seniors should choose someone who has proven themselves trustworthy and fiscally responsible. They also should live nearby and be both willing and able to be the power of attorney.
Advanced Medical Directives
Writing out advance medical directives is important when planning a senior’s estate. Seniors have the choice of when to pursue treatment vs when to enter hospice. Outlining these wishes ensures that the estate owner gets the end-of-life care they want.
Seniors should also set up a medical power of attorney. Like a financial power of attorney, this individual makes decisions on behalf of the senior. However, those decisions are medical rather than financial.
Beyond Contending With Inheritance Tips
Now that you know the basics of estate planning for seniors, it’s time to enhance older adults’ quality of life at a senior living community.
Aston Gardens at the Courtyards offers both independent and assisted living options for older adults who want to get in touch with themselves better.
Creating wills and trusts requires all of a senior’s needs to be met, so both new residents and their families should learn more about our Sun City Center community. Contact us to schedule a tour of the best senior community amenities in Florida!
