As the baby boomer generation and their depression-era parents increase in age, we are getting closer to the largest transfer of wealth in history. To be executed efficiently, this wealth transfer requires some estate planning work to be done now, while you still can.
The depression-era generation valued frugality and have built up a substantial amount of assets over their lifetimes. While their children may be expecting to inherit much of this wealth, the reality is that without proper estate planning in place their parents may have very little to pass down to them.
The good news is that advances in modern health care are continually increasing our life spans. The bad news is that as people continue to live longer, the chances of dementia type diseases like Alzheimer’s is rapidly increasing. In 2006, there was an estimated 26.6 million sufferers worldwide. This number is predicted to grow to the point that Alzheimer’s affects 1 in every 85 people globally by 2050.
These types of diseases that progressively worsen can cause two main problems to the estate planning process. In addition to requiring substantial and expensive long term care, once dementia has set in, the afflicted can no longer name beneficiaries or create a new will or power or attorney. This means that once a person is in this position, it’s often too late to take care of your estate plans.
There are a wide variety of things that can be done now to properly plan for the day in the future that you may need long term care. A properly structured estate plan will ensure that your needs are taken care of when the time comes and that the maximum legacy is available to be left to your loved ones and/or favourite charity when you pass away. A current will, power of attorney and representative agreement are an absolute must. Additionally, tax minimization, avoiding estate costs & probate fees, reducing legal & accounting fees and providing funding for long term care costs are just a few of the strategies that should be discussed. There are simple changes you can make to your investment assets that will allow them to completely bypass the estate and probate, saving considerable sums of money that would otherwise be lost.
I realize that many of you reading this will do two things: 1) you’ll probably agree that the issues are important and that they should be addressed. And 2) you’ll probably think that it sounds like an awful lot of work and will “put it off” to do sometime down the road when you have more time.
When you think about how much work it is to prepare your estate plan and make sure your things are in order I want you to compare that to two other things. First of all, compare it to how much hard work you put into building up your nest egg and all of a sudden the amount of work required to protect it will seem much smaller. Secondly, you need to consider how much work you will be placing on your loved ones if you become no-longer able to make decisions on your own or if you were to pass away. The work required now to get your estate plans in order will be much less than these other two feats.
Hopefully this will be enough motivation to get started now instead of procrastinating another day. Talk to an estate planning specialist today to take care of things while you still can.
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