Passages

Before I became a lawyer, I worked as a social worker in a drug treatment community.  I know, sounds like fun Len! It was, but law school sounded like real fun. The only missing ingredient was talking about Afeelings.@  That is what we did in social work, we talked about feelings.  Unfortunately, the salary for feelings was less than the salary for trusts and taxes.

I guess it was time of passage for me.  A popular book from that era wasAPassages.@   It was written by a thirty-something author for those of us approaching that age.  Thirty-something was a big topic and there was even a TV show about it.  The book laid out what people in their twenties, thirties and forties should be feeling and doing.   The author called thirty the Abig Three-O.@  What I would do to be back at the big Three-O!   Now, Three-O years past the big Three-O, I see passages but from the perspective of an elder law attorney.   The big Three-O is now the Big ASix-O@ and we counsel people in their 60s, 70s, 80s, and even 90s on the legal challenges and passages that they face.

The Sixties.

1. Make sure you have good Powers of Attorney for Health Care and for Assets.  A Power of Attorney is the most valuable document you can have.   All Powers of Attorney are NOT equal.  Do not trust a software program or a store-bought document.   This is a dangerous mistake.   Make sure you understand how they work and what powers you are handing out.  Develop a relationship with an advisor so you don’t have to choose one in a time of crisis.

2.  Consider long term care insurance.   This provides flexibility for the care you will receive if you get sick.   It may make the difference between staying at home and going into a facility.  Policies are more reasonable when purchased at this age.

3.  Begin thinking about management of your assets.  Communicate with your spouse.  Don’t let one spouse handle everything.  Have a Letter of Instruction.  It is more important than a Will in many cases.  Start planning for Medicare and Social Security.   Do not wait until you are at retirement age.  Do NOT throw old bank statements or check copies away!  Save them. Save at least 5 years’ worth. Document any gifts you make.

The Seventies.    This is the time to really think about long term care planning.  1 out of 2 people spend time in a nursing home before they die.  At this age, you should NOT consider investments that tie up your money.  Do NOT purchase annuities without thoroughly understanding their limitations.   Pare down your life insurance.  Look at pre-need funerals instead.   If you want to make gifts, do it now.   Gifting carries penalties in terms of long term care planning.  In your early seventies you can expect several more years of good health so now is the time to think about a gift program.  Long term care insurance is still a viable option.  Consolidate your assets.  Understand your health insurance and don’t buy on price alone.  Make sure that you have chosen advisors that you can rely on in times of crisis.   If you have disabled kids, now is the time to think about funding a special needs trust.  Do NOT throw your old bank statements or check copies away! Save at least 5 years’ worth.  Document gifts you make.   Save everything and keep it organized.  Do not keep envelopes.  Use folders.  Save all transaction records from accounts you close.

The Eighties.    At this point, you should be paring down even more.   No gifts over $500 without understanding the impact they may have on your long term care planning.  Make sure your health insurance protects you if you enter a nursing home rehab.   Cash your life insurance.   Use pre-need funerals instead.   No annuities under ANY circumstances.  No savings bonds either.  These assets are too cumbersome and slow you down.  Reduce retirement accounts in a systematic way.  I really want my clients in this age group to be Afast on their feet.@   If you are married, understand what will happen if one of you enters a nursing home. Find out where you stand and don=t stay up at night worrying about it.  If your spouse doesn’t= want to go along, then drag him along.   It will be your job to clean up the mess if he doesn’t.  I will say this again, do NOT throw bank statements or check copies away!  Save 5 years’ worth.  Document any gifts over $500.   Do not take large cash withdrawals.  Save everything and keep it organized.  Use folders not envelopes.  Save transaction records from closed accounts.  Do not close accounts for cash.   Cash gifts are not safe.

The Nineties.   Relax and enjoy the contentment that comes from following the advice given above.  One bank account!  Put it in joint names with a trusted child.  Direct deposits are fine.   IRAs should be down and insurance cashed.   Powers of Attorney are current.   Arrange your assets so your estate doesn’t have to be probated.   Make sure your home can get to your heirs without legal intervention.  Get comfy shoes and a warm blanky.   Watch the Phillies and Eagles.  Eat hotdogs if you want.   Try to avoid those big funny-looking sunglasses!  Visit your lawyer and make sure he has followed his own advice.

mm About Leonard L. Shober

Leonard L. Shober has focused a quarter century on representing clients in their estates and tax matters. He began his legal career in an estate planning practice. However, his interest in taxes and estate planning led him to pursue a Master of Laws (LLM) from Temple which he completed in 1994. Len continued his estate and tax practice which ultimately led to a focus on the needs of the elderly and disabled. At Shober & Rock, Len focuses on elder law, tax and estate planning and estate and trust administration.

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