Old couple

There are several measures you can use to protect yourself and your family.

The life expectancy for Americans is getting longer and longer, with the concept that the longer you live the more likely you’ll have an even longer life span, according to Kiplinger, in “Are You Ready for Longevity? 4 Steps to Take Now“.

Given the happy fact that you should expect to live a long time, what can you do to protect yourself and your family? Here are four steps:

1. Have a plan for long term care. For a married couple, it’s likely that one of the two will end up in a nursing home. Plan for how you’ll manage to pay for that long before you’ll need it. If you can purchase a long term care insurance policy while you are still healthy enough to qualify, you won’t need to use up the entire household’s money to pay for the care. Long term care insurance may pay for both skilled nursing home care and in-home health care aides, so check your policy before you buy it.

Traditional long term care policies can be expensive. However, insurance companies have created hybrid policies that combine long term care benefits with life insurance. If you don’t use the long term benefits, your loved ones receive the life insurance proceeds upon your death. That takes away the worry that you will pay premiums and get nothing back.

2. Plan for incapacity. You’ll need to have a health care proxy so you can name another person to make your decisions when you are no longer able to do so. Do not assume that because you are married, your spouse will be legally able to make those decisions. If you become incompetent and don’t have a health care proxy in place, your family will need to go to court to get legal authority to make those decisions. This is a guardianship proceeding, which is expensive, time-consuming and stressful.

The same holds true for financial decisions. You’ll want a power of attorney so someone else can sign on your behalf and access your accounts. This should be a trusted individual who will look out for you and your family.

If you die and assets are solely in your name, your family will need to go to court before they can access any of your assets. This is a process known as probate. If you have an estate plan in place, your plan might include having some accounts that are in a trust or that are POD or Payable on Death, so your loved ones are not left without assets. Your estate planning attorney can recommend the right planning tools to protect your family.

Finally, do tax planning as part of a comprehensive estate plan. You likely won’t be paying federal estate tax.  However, there is a good chance that your state has an estate tax or an inheritance tax.

Reference: Kiplinger (August 13, 2018) “Are You Ready for Longevity? 4 Steps to Take Now

Mr. Amoruso concentrates his practice on Elder Law, Comprehensive Estate Planning, Asset Preservation, Estate Administration and Guardianship.