October 15th, 2020
As we enter the final stretch of 2020, the word “prepared” comes to mind. I think that many of us were not prepared for what this year has brought so far! We saw it in empty shelves and stocking pantries and unexpected twists and turns in the news throughout the year. As estate planners, preparedness is not a new concept to us. In fact, it is at the heart of what we do!
Think back to times you have prepared for something. You likely prepared for a test by studying. You have probably prepared for company by cleaning the house and creating a welcoming atmosphere. You may have prepared for flu season with a vaccine to protect against illness. Ideally, you are able to prepare for retirement by saving and investing. Estate planning is just another form of preparing.
Not having an estate plan is like not studying for a test you know is inevitable. You will feel much more confident going into that test if you know you have planned and prepared! Preparing is not going to cause terrible things to happen to you – just remember the old adage “prepare for the worst, hope for the best”. Preparing will give you peace of mind in a crisis if it does happen.
Although we wish we could, we can’t prevent an unexpected illness. But the good news is, we can mitigate the effects it has through preparing your estate plan. Being prepared means having powers of attorney in place so that your loved ones do not have to seek the court’s approval to make medical and financial decisions for you in a crisis. This can be a long and emotional process when what you will need most is time with your loved ones.
Preparing with an estate plan can also include protections for your home and hard-earned assets should you or your spouse need nursing home care in the future. This is an especially important aspect of preparing because to achieve the best results, we should plan at least five years in advance of a long-term illness. Without this preparation, you are unlikely to be able to protect as many assets and could potentially need to spend your assets down to just a couple thousand dollars, nominal life insurance, a vehicle, and your home. And even though your home is safe while you and your spouse are alive, the state may place a lien on your home after you have both passed away in order to recoup funds spend on your care while in a nursing home!
Not preparing in this instance could mean running out of money which could prevent you from returning home if you ever recovered enough to leave a nursing facility, but still needed some care in the home. Remember, when you run out of money, you run out of options. Preparing is what gives you these options.
As we prepare for the last months of 2020 and are hopeful for what 2021 will bring, we hope you reflect on what you are grateful for throughout this difficult year, but also areas where you can be more prepared. If one of those areas is estate planning, we encourage you to reach out to an estate planning professional. It is never too early to plan – or prepare!