As Texans are living longer than ever before, it’s crucial to consider how this affects your estate planning. With advances in medicine and technology, the average lifespan has increased significantly in recent decades. Living longer creates new challenges and considerations for your estate planning.
One of the most significant impacts of longer lifespans is the increased likelihood of incapacity.
As you age, the risk of developing conditions such as dementia or Alzheimer’s disease increases. This can make it more difficult to manage your finances, make healthcare decisions, and handle other important matters. Without proper planning, these challenges can create significant stress and financial strain for your loved ones.
Another important consideration is the potential for a longer retirement.
While a longer lifespan can be a blessing, you’ll need to support yourself for a longer period of time. This can impact the amount of money you need to save, as well as your retirement planning and income strategies.
Five estate planning tips to address long-term challenges of living a longer life.
1. Establish a living trust to protect your assets and ensure they are distributed according to your wishes.
A living trust is allows you to transfer ownership of your assets to a trust while you are still alive. A great benefit of a revocable living trust is the ability to appoint a reliable trustee. When you’re no longer able to manage your assets on your own, that is when a living trust is applied. This can be especially helpful for adult children who are managing the long-term care of their parents. Name a trustee who can manage trust funds to ensure they are maximized for the parent’s care and well being. The adult child can also protect against scams, online fraud, and the rapidly expanding world of financial elder abuse.
A major benefit of a living trust is to avoid probate, which will save your beneficiaries time and money.
When establishing a living trust, it’s important to work with an experienced estate planning attorney. An attorney can help you draft the trust document and fund the trust with your assets. Probate with a will takes years to resolve within the court system and delay providing help to your loved ones to help you in the event of incapacity. For more information about trusts, check out our blog article, “How Trusts Can Fit Into Your Estate Plan”.
2. Create a durable power of attorney for finances and healthcare
A durable power of attorney is necessary when you are unable to handle your own affairs or speak for yourself. A durable power of attorney for finances allows the person you designate to manage your financial affairs. This can include paying bills, managing investments, and making other financial decisions on your behalf. A durable power of attorney for healthcare allows you to designate someone to make medical decisions on your behalf. This can include decisions about medical treatment, end-of-life care, and more.
If you become incapacitated, it’s important to designate a trusted family member or friend to manage your affairs.
When creating a durable power of attorney, you must choose an agent. Someone you trust and who is capable of managing your affairs. Be clear about your wishes and preferences, and ensure that your documents are properly executed and legally valid. Read more about the importance of a power of attorney in “The Importance of Advance Directives in Texas Estate Planning”.
3. Update beneficiary designations on retirement accounts, life insurance policies, and other assets to reflect your current wishes.
It’s important to regularly review and update your beneficiary designations to ensure that they reflect your current wishes. Beneficiary designations override any provisions in your will or trust, so it’s important to keep them up-to-date.
When updating your beneficiary designations, be sure to consider any changes in your life circumstances. These include marriage, divorce, the birth of a child or grandchild, or the death of a loved one. You should also ensure that your beneficiary designations coordinate with your overall estate plan. Check out this blog “Individuals You Need to Consider Naming in Your Estate Plan” to learn more.
4. Plan for long-term care.
Long-term care planning is an essential component of estate planning. As we live longer the likelihood of needing long-term care increases. Long-term care can be expensive, and without proper preparation, it can quickly deplete your savings and assets.
One option to consider is long-term care insurance, which can help cover your long-term care costs, if needed. Another option is Medicaid planning. This involves structuring your assets and income in a way that qualifies you for Medicaid benefits. At the same time, you can preserve some of your assets for your loved ones. To learn more about Medicaid qualifications, read our blog article “How To Qualify for Medicaid in Texas Regardless of Income” .
Long-term care planning can be complex, so it’s important to work with a qualified professional. An estate planning attorney can help you understand your options and create a plan that meets your needs and goals.
5. Review and update your estate plan regularly
Estate planning is not just a one-time event. It’s important to keep your estate plan current with changes in your life and the law. Your estate plan should reflect your current circumstances, needs, and wishes. Your estate plan should therefore be updated to reflect any changes in your family, finances, or health.
Major life events can necessitate an update to your estate plan, such as:
- child birth
- the death of a loved one
- financial changes
For example, if you get married, you may want to include your new spouse as a beneficiary or executor. If you have children, you may want to update your estate plan to include provisions for their care and education. Learn how life changes can trigger updates to your estate plan “Life Events That Could Impact Your Current Estate Plan”.
State and federal laws are ever-changing and could have a significant impact on your estate plan.
It’s important to ensure that your estate plan reflects changes in Texas estate tax laws or Medicaid eligibility requirements. Learn more about estate taxes in our blog article “How Will Taxes Affect Your Texas Estate?”.
Review your estate plan on a regular basis to ensure that it remains relevant and effective. That way your wishes are carried out in the event of your incapacity or death. An experienced estate planning attorney can help you review your estate plan. Also make any necessary updates to ensure that it meets your current needs and goals.
Our team of attorneys can provide the guidance and support you need to:
- establish a living trust
- create a durable power of attorney
- update your beneficiary designations
- plan for long-term care
- review and update your estate plan
Estate planning for longer life expectancy is important. Living longer will give you more time to enjoy life with family, friends, and loved ones. Yet, longevity also creates new challenges when it comes to finances and long-term care. Texans need to plan ahead for this reason. Make sure your wishes are carried out and your loved ones are provided for.
Estate planning can be a complex and overwhelming process, but Attorney Steven Holman is here to help.
At Holman Law, we understand that every client is unique. That’s why we take a personalized approach so your estate plan meets your specific needs and goals. Estate planning attorney Steven C. Holman has been helping Dallas area individuals and families for over 16 years. If you are located in or around Dallas-Ft. Worth and would like to discuss establishing or updating your estate plan, contact us today to schedule a consultation. We would love to help you plan for your future.