Estate planning is critical for everyone. That goes double for seniors.
Basic estate planning means you’ve drafted and properly recorded legal documents, such as wills and powers of attorneys, and they’re all up-to-date. Wills written 20 years again after a child is born are now severely dated and possibly inaccurate.
There’s a fair chance that things have changed, and the will may be missing all of the grandchildren or still includes individuals whom you no longer want as primary beneficiaries.
The Herald-Standard explained, in its recent article, “Your Financial Future: Estate planning,” that powers of attorney come in two general flavors.
One power of attorney is for health care. This document designates an individual and gives him or her the authority to make health care decisions for you, if you are incapacitated. Capacity is the ability to understand your options and pick the best one. There are times when people may not have capacity temporarily, such as when they are in a coma. It can also be long term, when a person suffers from dementia.
The other type of power of attorney is for financial matters. This permits the appointed individual to make decisions concerning paying your bills and those that keep your family’s financial life functioning. Note that powers of attorney end upon your death.
Powers of attorney are granted under state laws. Because of this fact, federal government agencies don’t typically recognize them. Since federal law supersedes state law, your power of attorney may not be recognized by agencies, like the Social Security Administration.
The Social Security Administration has its own form which appoints a personal representative. The agency requires that its own form be used to make decisions on behalf of another. If someone may need this, it’s prudent to prepare Social Security Administration paperwork in advance while the senior can still make sound decisions. This may be called for, if he or she moves into a nursing home, and their benefit checks are mailed to their old address. Yes, this is another good reason to receive your payments by direct deposit.
That individual may also want to set up a Social Security Administration account online at Social Security/myaccount. Changes can be made here at any time without the need to speak to a Social Security Administration employee.
Reference: Herald-Standard (November 23, 2017) “Your Financial Future: Estate planning”