As I write this, a week of intense heat and humidity has given way to a breezy summer day that almost borders on cool – I know autumn is lurking just around the corner. I anticipate summer so much each year and just as it is hitting peak enjoyments, it ends. From being a kid to pondering retirement, each summer holds its own magic and memories. It makes me wonder, when exactly is the summer of your life.
Since this is an estate planning blog, I can tell you from that perspective, the summer of your life is from your mid-thirties to your mid-fifties. You are likely to earn a decent income. You have capital responsibilities, a mortgage, car payments, possibly children, college tuition, and weddings. It is likely the peak of your earning potential and quite possibly, the most overwhelming spending years. Summers are the busiest, most enjoyable, and things are moving at their fastest.
So how should you use the summer of your life and what should you accomplish?
- Health Care Planning
I was astonished that the year I turned 40, a friend died of cancer. It seemed so young because it was so young. But it happened. So, it taught me that health care planning is not something to put off because it’s not just something that affects “old” people. By executing a power of attorney for healthcare, a living will, and a HIPAA authorization, you can put your wishes in writing. It takes some thought, a few hours of your time, and then it’s done so you can go back to living in the moment.
2. Estate Planning
Do you own a home, have investments, and some savings? Great. Are they in a trust? They need to be. Here’s why: A trust avoids probate and provides flexible asset management during your life and at your death. For example, if you have minor children, or even young adults, chances are that you would not want a court through guardianship proceedings or an 18-year-old to manage your financial affairs. No matter how capable your child is, would you want to place that burden of probate and asset management on them? By using a trust to hold assets, you can specify the ages that children will step up to act as financial managers. In the interim, you can specify a trusted adult or a corporate trustee as your manager.
3. Financial Review
I’ll bet somewhere, some of you have a note or reminder, perhaps just a mental one, to find a financial planner. I cannot stress enough how important it is to do this. Sure, I have many clients who have successfully handled their investments without professional advice. Most likely, success is tied to the sound investing of one individual, be it husband or wife, and maybe a little luck or advice and assistance from a parent when they got started. But what happens when that person is no longer available or capable of guiding those matters? Finding a financial advisor that you can work with effectively can provide long term stability and give your loved ones the security of being cared for in a moment of crisis.
4. Long Term Care Planning
Have you seen the numbers lately? One out of two Americans will need long term care. On average we can expect to spend over $300,000 on health care as we age. Like any form of insurance, long term care coverage only gets more expensive as you get older. Get together with your insurance agent and ask about long term care. Knowing your options is essential to making a choice.
5. Dealing with Aging Parents
It’s wonderful that many of you still have parents as a part of your lives. But with that comes more responsibility for you. As our parents age, it becomes our duty to consider their care. Having their documents in place and organized is not only a blessing for your parents, but it can also make your job as care provider, as financial advisor, as executor easier and less expensive. Without a durable power of attorney, you may need to go to court to become a parent’s guardian to manage their finances. Without a will, you and your brother who has never helped (you know the one) stand on equal footing to handle your parents’ estate. It’s easy to take care of things so don’t delay.
I know, that sounds like a lot and none of it sounds as fun as using your summer to eat out, boat, bike, vacation, and go to events. The goal is to allow you to do all of that comfortably and to give you the peace of mind to enjoy every summer to come. But at some point, these steps will all be necessary. As summer wraps up, let’s get together and get you on course.