Dear Market Watcher,
I am 76 years old and have been widowed since 1994. I am retired in South Carolina. I have $620,000 in savings, supplemental insurance income of $2,200 per month and have a five-year long-term care policy of about $4,200 per month. My only debt is $900 a month on a $190,000 mortgage balance on an $850,000 house. However, I do not have any relatives to whom I could leave estate assets, and I am considering various charities as beneficiaries of the estate.
I do not have any family or close friends living in South Carolina who know my current circumstances and finances that would help manage my estate. I hope to remain in my home and, in time, perhaps rely on home health care for as long as possible. Do you have suggestions on who, what and how I can manage my estate? Surely there must be others in a similar predicament.
be seen: My wife and I are approaching 60 and have 10-year-old twins. We do not have 529 plans. How do we retire with college costs looming?
Dear reader,
You are definitely not the only one in this situation. Even when people have relatives to manage their estate and leave it to them, they don't always plan ahead, so you're actually ahead of the game.
If you don't have close relatives, or any family or friends you trust to let you manage your estate, you can rely on professionals you pay to do the job. This could be a financial planner, accountant or lawyer. There are also professional executors you can look for. Just make sure you vet them carefully before giving them the job.
Before choosing someone, check their credentials and look for referrals. It also doesn't hurt to interview a few professionals, as this is a serious and important relationship. Finally, make sure they focus on estate planning — specifically in your state — so that everything you want to happen with your money actually happens.
You will have to pay them of course. This fee can be charged on an hourly or monthly basis. This is another question to ask when you are looking around for the right person.
This person will take on the role of property manager, which means they do almost everything you need after you pass. The IRS says they handle probate estates, distributing the inheritance as you wish and paying any debts. You talked a lot about the ideal candidate when answering this reader's question, which wasn't much different from your situation.
to delegate
There are some documents that you must have. A power of attorney is one of those documents because it allows the person you choose to have the legal right to act on your behalf. There are different types of powers – permanent powers, for example, are effective if you become incapacitated, while non-permanent powers will cease if that happens. A “spring” durable power of attorney will become effective at the time of incapacity.
A health care proxy gives someone the power to make decisions about your health care. You must also have a living will, which lists what you want to happen (or not happen) if you are incapacitated. Here's more about advance care planning, from the National Institute on Aging.
If there are any charities you have close relationships with, and have already contacted, you may find that they have an individual who can take on the role of executor. But again, make sure that you can trust them so that your wishes are met.
Health care plans
In the meantime, your primary focus should be on your health – now and in the future. Think about everything you can and want in your older age. This could be something as simple as working with a paratransit company, which transports people with mobility issues (if, for example, you need to get to doctor appointments) and/or finding a grocery delivery service.
Make sure you have a strong network of medical professionals, ideally if they can communicate with each other to monitor your health or keep each other informed about your visits and well-being. (You may have to give written permission for these people to work together or with a caregiver to avoid any medical-legal hurdles.) While you're still healthy, prepare your home to be functional if you need extra help, such as extra bars to hold on to in the bathroom or Railing outside the house if there are stairs.
The National Institute on Aging suggests putting all of your important legal papers and documents in one place and telling someone you trust (your attorney, for example) where to find them. The agency also suggests reviewing your plans regularly — at least once a year and/or after a major life change.
You are doing a great job of being proactive with your estate planning, and it will definitely help you in the long run.
See also: Reverse mortgage, sell home or Medicaid? How can my parents pay for long-term care?
