Developing wills, trusts, and other legal documents is a task many people plan to do “someday.” Then an emergency occurs and families don’t know a senior loved one’s wishes. It can lead to disagreements and long-term rifts among family members.
While you may not be excited to discuss it, making sure the older adults in your family have solid estate plans is important. Regardless of what assets the senior has, creating these documents will allow them to designate how they will be disbursed.
What Is the Purpose of a Will?
A last will and testament is an important legal document all adults should have, but especially older adults. It designates who should receive the senior’s assets—including real estate, investments, savings, and household items—in the event of their death.
Experts say almost 70 percent of Americans don’t have a will. When someone passes away without a will, it is left to the probate courts to decide how to equitably divide up the estate’s assets. That can often take a while.
Each state disburses assets differently when there isn’t a will. It might cause people the senior was closest to during their lifetime not to receive any of the estate’s assets. That’s why it’s imperative that older adults work with an attorney to set up a will.
Once they have a will, it’s important to keep a copy in a safe location that can be easily accessed by the executor. If the senior only keeps a copy in a safe deposit box, the family might not be able to access it on the weekend or without a court order.
How Is a Living Will Different?
A living will is different from a last will and testament. This document outlines how a person wants their end-of-life care handled in the event they can’t speak for themselves.
Having a living will can prevent disputes amongst family members and keep families from having to make difficult decisions. It gives families and medical professionals the direction they need to honor a person’s wishes.
For example, a living will might indicate that a person wants to receive palliative care at the end of life. It also often includes a person’s wishes on organ donation.
Why Seniors Might Consider a Trust
Another estate planning tool is a trust. Assets placed in a trust don’t have to go through probate. It is one of the many reasons people establish one. Here are a few other things a trust can help with:
- Reduce estate and gift tax burden
- Manage assets if grantor becomes incapacitated
- Avoid or minimize the probate process
- Provide long-term support for a child or grandchild with special needs
- Limit the amount of money a beneficiary can receive at one time (e.g., a minor child or grandchild)
- Prevent a beneficiary’s creditors from accessing the funds
We know financial and legal issues can be confusing. It’s why we designated a portion of The Sunrise Blog to address them. Read our “Finance & Planning” articles to learn more about topics ranging from Medicare open enrollment to senior care tax deductions.