Estate planning is something that remains a mystery to many people, until they finally sit down and get started on their plan. In fact, despite understanding how important it is to have an estate plan in place, over half of all Americans have yet to create one. If you are in the minority, and do have an estate plan in place, you are certainly off to a good start protecting yourself, your assets, and your loved ones. After failing to plan at all, however, the next biggest estate planning mistake is failing to update an estate plan. The attorneys at Nash, Nash, Bean & Ford, LLP urge seniors to take the time to review their current estate plan and make any necessary revisions.
How Often Should You Routinely Review Your Estate Plan?
There are no hard and fast rules with regard to conducting routine reviews of your estate plan. Most estate planning attorneys agree, however, that you need to review your estate plan more frequently during your 20s, 30s, and 40s because those are the decades when significant changes that impact your estate plan are more likely to occur. For most people, this is when they get married and become parents for the first time. You are also likely to see sizeable changes in your estate assets during these years as you advance in your career and watch investments come to fruition. With all of that in mind, it is advisable to schedule a routine review of your estate plan every three to five years until you get closer to retirement age.
Why Seniors Need to Update Their Estate Plans
When you reach your “Golden Years,” a wide range of things will change that could impact your estate plan. Failing to review and revise your estate plan to reflect these changes could completely derail the plan you took such time to create and update during your working years.
For most retirees, their income stream changes entirely when they reach retirement. Instead of living off a paycheck each month, you will be depending on Social Security, pensions, IRAs and other investments for your income. Now that you will be depending on some of your investments for your retirement income, you may need to make changes to the gifts you plan to leave your beneficiaries in your estate plan.
Another important reason to update your estate plan when you reach retirement age is to ensure that you have a solid Medicaid planning component in your plan to ensure that you can afford to pay for long-term care if you need it down the road.
Finally, you need to spend as much time as necessary reviewing your incapacity planning strategies and tools within your estate plan. As a senior, the odds have increased that you could become incapacitated because of Alzheimer’s or another age-related dementia condition. As much as we don’t want to dwell on the possibility, the reality is that one in three seniors dies suffering from Alzheimer’s disease. If you do become incapacitated at some point, who do you want to handle your assets and take over paying your bills for you? Who should make medical decisions for you? What about personal decisions, such as where you will live? Now is your chance to make these decisions for yourself instead of a judge making them for you at a later date. You also have the opportunity, if you have yet to do so, to execute an advanced directive that will ensure your wishes are honored with regard to end of life medical care. You may also wish to execute a separate advanced directive that appoints someone as your health care “Agent” to make health care decisions for you if you cannot make them yourself.
As you enter your retirement years, it is more important than ever before to make sure your estate plan reflects your wishes with regard to your own protection, your assets, and your loved ones. If you have not updated your estate plan recently, make an appointment to do so in the very near future.
Contact Elder Law Attorneys
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns regarding when or how to update your estate plan during your senior years, contact the experienced elder law attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.