Estate planning isn’t something that people tend to give a lot of thought to, but it’s an essential part of financial planning. Although many people think estate planning is just for “wealthy folks,” it’s actually for everyone. The fact is that life is unpredictable, and your loved ones will be glad if the unthinkable happens and you spent the time and effort in advance.

A survey found the majority of respondents believed estate planning was important, but only one-quarter had taken any action. If you pass without an estate plan, chances are the state may determine the disposition of your assets, and it may not do what you would have wanted.

What Are Things to Consider?

Here are some things to consider about estate planning:

You Have Flexibility

Many people put off estate planning because they’re not sure of everything yet. But remember that nothing is set in stone; you can change your will and other documents as circumstances or your preferences change. Many times it’s better to get a plan out there and revise it later than to wait for the “perfect time.”

Review Your Beneficiaries

You may already have a will from years ago. Is it still up to date? You may also have multiple bank accounts, investment accounts, and life insurance policies. Are the beneficiaries still who you want? If not, schedule time to update those. Otherwise, your beneficiaries may have to go through a lengthy and expensive probate process that could easily have been avoided with a little proper planning on your part.

Consult a Professional

There are DIY websites and software products that make it tempting to go it alone. But estate planning laws and documents can be complex, and if you try to do it on your own, there’s a good chance that you won’t be doing what you think you are, or that the forms you created won’t be accepted by the courts. Furthermore, the laws vary between states. An estate planning professional can help you navigate the legalities.

They can also help ensure there are no gaps in your plan. Estate planners are trained to consider various scenarios and to help ensure every eventuality is covered. What if your beneficiary is no longer available – is there a contingent beneficiary? What if someone is alive, but incapacitated? The law is different in each situation.

An estate planning attorney or advisor can also help you streamline the planning process. Looking at everything you need to do at once can seem overwhelming. A pro can help you go through the steps in a logical order.

Take your time when choosing an estate planning consultant. They need to understand your family dynamics and your preferences, and not try to fit you in a mold. Every family’s situation is different, and to properly document your wishes, the professional needs to take the time to get to know your family’s circumstances.

What is in an Estate Plan?

An estate plan typically includes these documents:

• A will or trust
• Power of attorney
• Advance healthcare directive
• Medical power of attorney

An advance healthcare directive and medical power of attorney together make up what is sometimes called a living will.

If you own a business, you will also need a business succession plan. Without a business succession plan, in the event you become incapacitated, your business could lose its ability to pay employees, vendors, and creditors, leading to legal fees and penalties. Yet a survey found that fewer than 25% of private companies reported having a formal succession plan in place.

Will vs. Trust

A will is a legal document that specifies how your assets are to be distributed to beneficiaries after you pass. It may also specify other things, such as who becomes the guardian of your minor children and the disposition of your remains. A trust is a document that transfers the assets that you select to a trust account while you are alive, to be managed by another person called a trustee. You can have a will, a trust, or both, depending on your situation and needs.

Advantages and Disadvantages of a Will

The advantages of a will are:

• It’s simple to create and update
• You can specify the disposition of your assets and beneficiaries in as much detail as you want

The disadvantages of a will are:

• Your beneficiaries still have to go through probate, which can take weeks or months
• Your assets are subject to estate taxes

Advantages and Disadvantages of a Trust

The advantages of a trust are:

• Avoids the probate process – assets pass directly to your beneficiaries
• The trustee can manage your assets on behalf of your beneficiaries if you become incapacitated
• Gives you more control over when and how your assets are distributed – for example, you can hold an inheritance until a beneficiary turns 21

The main disadvantage of a trust is that it’s more complex and expensive to create and maintain than a will. You also need to review and update the trust annually.

Trusts can be revocable or irrevocable. A revocable trust can be changed or reversed at any time, whereas an irrevocable trust cannot. Because a revocable trust can be reversed, you retain ownership of your assets, so creditors can go after them, and they are subject to estate taxes. With an irrevocable trust, the trust account takes full ownership of the transferred assets, so they are not within reach of creditors, and you minimize estate taxes.

Power of Attorney

With a power of attorney, you specify who will act on your behalf in the event you become incapacitated and unable to act on your own behalf. You can authorize another person, known as an agent or attorney-in-fact, to have limited or broad powers to make legal decisions about your property and finances. Without a power of attorney, a court will appoint a guardian, usually a family member, to make decisions about your property and finances. Other family members will have to petition the court for access to your finances. A power of attorney helps ensure your desires will be followed in the event you are unable to act for yourself.

Living Will

The living will consists of a medical power of attorney and an advance healthcare directive.

Medical Power of Attorney

Like a power of attorney, a medical power of attorney designates another individual to make decisions for you in the event you are unable to make decisions or express your desires. In this case, the decisions pertain to the healthcare and treatment you will receive.

The agent is authorized to work with your healthcare providers and make healthcare decisions on your behalf. The medical power of attorney is only in effect while you are incapacitated and your attending physician certifies you are incapacitated. After you regain the capacity to make decisions, your agent no longer can speak on your behalf.

If you don’t have a medical power of attorney, the law will specify who should make decisions on your behalf. In many cases, that person is your spouse, your adult children, your parents, or your nearest living relative, in that order.

With a medical power of attorney, you can specify:

• Who will make healthcare decisions on your behalf
• Which healthcare decisions the agent can make for you and which they cannot
• When the medical power of attorney is in effect (you can specify an expiration date)

Advance Directive

An advance directive specifies what life-sustaining treatment you are to receive in the event you have a terminal illness or injury (not expected to live more than six months). It provides instructions about whether you will receive food, water, breathing assistance, and other measures to sustain your life.

Your medical power of attorney may also specify these things. If your medical power of attorney or your agent’s decision conflicts with your advance directive, the advance directive will have precedence.

Steps to Create an Estate Plan

Now that you know the main documents in a typical estate plan, here are the basic steps to creating an estate plan:

1. Review your beneficiaries

Consider all of the bank accounts, investment accounts, retirement accounts, IRAs, life insurance policies, and annuities you may have. Review the beneficiaries for each account and ensure they are who you want. Remember that beneficiaries in an account take priority over your will.

2. Create a will

For most people, their will is the document that specifies who should receive their assets (beneficiaries). Think about all of your property and who you would like to receive it.

If you have minor children, in your will you can specify an appropriate guardian for your minor children. You can also name someone to handle your children’s financial affairs until they become legal adults. This may, but does not have to be, the same person as their guardian.

3. Consider a living trust

A living trust is more complex and expensive to set up and maintain than a will, but gives you more detailed control over how your assets are to be distributed, avoids probate, and provides some estate tax advantages.

4. Create a power of attorney

The power of attorney gives another person the power to make financial decisions for you in the event you are unable to decide for yourself.

5. Create a living will

A living will specifies who will make healthcare decisions for you if you are unable to decide for yourself, and expresses your wishes concerning end-of-life care if you become terminally ill or injured. This may be, but does not have to be, the same person you designate in your power of attorney.

6. Consider estate taxes

There are federal estate taxes and also state estate taxes in many states. The minimum estate size for federal estate taxes is $13.61 million in 2024. However, this provision will sunset at the end of 2025. If it’s not extended, the minimum will return to the pre-2017 number, which was around $6 million.

7. Provide for your digital assets

Consider all of the data you have on your computer and phone, and your online accounts, including email, social media, and PayPal. You will want someone to have access to these accounts after you pass and dispose of them according to your wishes.

8. Store all of your estate planning documents safely

In some states, only the original, signed, and witnessed will is legally accepted; copies are not recognized. So you will want to store your estate planning documents in a secure location. The executor of your will and the agents you designate in your living will will need to know where the documents are located and be able to access them. It may not be a good idea to store these documents in a bank safe deposit box, because your executor and agents may not have access to the box.

View this video for more information about estate planning:

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The older I get,

The truer it is –

It’s the people you love, not the money and stuff,

That makes you rich.

-Alan Jackson, The Older I Get

Having close, positive relationships is crucial to health and happiness in retirement. This applies to relationships with your spouse as well as relationships with your other family members and friends. Fortunately, having good relationships is a learnable skill.

Alexandra Stockwell, M.D., a retired family physician turned relationship coach, suggests that the quality of our relationships can steadily improve as we age, just as our financial net worth and general knowledge are greater in our 60s than in our 20s.

Retirement changes many aspects of your life, from your self-identity to your morning routine. It can also change your and your spouse’s roles in your marriage. This can particularly happen if one spouse retires earlier than the other. Perhaps you were the main breadwinner, while your spouse took care of the home and the kids; after retirement, now you and your spouse share the duties of washing the dishes and sweeping the floor.

There are also physiological and mental changes that occur to each of us as we get older. These changes can also affect your relationship with your spouse, even if you’ve been together a long time.

Happy Marriage

Unfortunately, the divorce rate for Americans over 55 has doubled since 1990 and tripled for Americans over 65. More than 30% of divorces are among couples aged 50 and over. One in 10 divorces are among couples aged 65 and over.

Lee Baucom, Ph.D., a marriage and life coach, finds too many couples put their relationship with each other on the back burner during the years they are raising kids, navigating their careers, and taking care of the home. But then, by the time they retire and spend more time together, they find they have grown apart, are disconnected, and have lost sight of each other.

Common Marriage Issues for Retirees

Here are some other issues that can cause marital conflict in retirement:

Differing expectations

Sometimes, couples have different expectations about who will do what around the home after retirement. A spouse who had been the primary breadwinner may unconsciously expect the other spouse to continue doing most of the house chores after retirement. Other couples may have different ideas about what they will do in retirement. One spouse may expect the couple to be together most of the time, while the other prefers regular get-togethers with his or her friends.

Each spouse may have their vision of retirement but may not always be good at expressing it. This can lead to conflicts.

Couples can discuss their expectations about retirement and how their lives will change. This includes sharing their ideas about their day-to-day life in retirement and their respective roles. This conversation continues throughout retirement.

Finances

Money is a very common flashpoint for couples. It can become more sensitive after retirement, and there are no longer regular paychecks. Couples may disagree about their retirement budget and where to place their assets. A spouse accustomed to saving may have difficulty spending on new experiences and hobbies.

Each spouse’s previous life experiences influence their attitudes toward spending and investing. Couples can share their viewpoints so each can understand the other’s position. If a couple cannot agree about retirement finances, a financial advisor may be able to help with creating a budget that appeals to both spouses.

Personal foibles

We each have habits and behaviors that others may find annoying. Maybe someone chews too loudly, while another leaves their clothes lying out instead of putting them away. These small irritants can become magnified when you and your spouse are together all the time. Though seemingly small, they can eventually become big points of aggravation.

Communication helps in this area as well. Couples can discuss their thoughts and feelings, and each might agree to change some behaviors in exchange for corresponding changes by the other.

How to Overcome These Issues

How can couples prevent and overcome this? Dr. Baucom offers some suggestions:

Prioritize Your Relationship

Make connecting with your spouse a priority. There are three ways to connect:

• Physically: touching, hugging, holding hands
• Emotionally: showing interest in your spouse, taking interest in what interests them, giving them attention, and acknowledging them
• Spiritually: sharing your values and beliefs, including what you want your retirement to be

Change Yourself

Each spouse should try to change themselves in ways that foster a closer connection. Your spouse and your relationship have changed over the years, and you will want to adjust accordingly, in positive ways.

Think of Yourself and Your Spouse as a Team

Even if you and your spouse have different roles, for example, one is working outside the home while the other takes care of the family, keep thinking of the marriage as a cooperation, not a competition.

One spouse can take the initiative to start bringing the relationship closer. People are designed for connection, so once a relationship is reignited, it can grow back quickly. In some cases, relationship coaching can be helpful. Many couples grow apart and then come back together. Some even divorce and then remarry each other.

Like good health or career success, quality relationships take conscious effort. A decades-long Harvard study finds positive relationships make us happier, and healthier, and help us live longer. This applies to happiness in retirement as well. Most people’s primary relationship is with their spouse, so a quality marital relationship is well worth the effort.

In this video, Dr. Baucom describes how to develop intimacy in your marriage.

Maintaining Social Connections in Retirement

While your spouse is your single most important social connection, it’s helpful to have connections with others as well. Keeping connections with friends and family rounds out your life and can give you a more enriched retirement. It can also open you to a variety of experiences that you can share with your spouse.

Here are some ways you can maintain social connections in retirement and make new ones.

Volunteering

Volunteering is very popular among older adults. Through volunteering, you help yourself physically and mentally, give back to your community, and make new social contacts.

Part-time Employment

Many retirees also choose part-time employment. Part-time employment enables you to stay productive and engaged while also giving you daily interactions with your coworkers. This can be particularly rewarding if your workplace has other employees around the same age. It also adds positive structure and routine to your life.

Hobby Groups and Clubs

There are many hobbies you can choose from, ranging from swimming to poetry reading to card games. Enjoying a fulfilling hobby in the company of like-minded people is a good way to make new friends.

Although seeking friendships among people your own age is healthy and natural, you might also consider cultivating some friendships with younger generations. George Vaillant, director of a landmark study of adult development at Harvard, says, “Learning to gain younger friends as we lose older ones adds more to life’s enjoyment than retirement income.” Making friends among younger people gives us opportunities to experience new things we might not otherwise, while younger people are often attracted to the knowledge and life experiences of older adults.

Relationship with Grown Children

After retirement, many people desire to visit their children and grandchildren more often. Many retirees move to be closer to their children or other close relatives. However, as with your spouse, the relationship can sometimes be strained. There may be personality differences or baggage from past relationship problems. There may also be difficulties related to lifestyle or financial choices the child or the parent made.

Karen Midyet, a clinical psychologist with 45 years of experience in counseling and mental health, offers some suggestions to avoid or alleviate tension with adult children:

Be supportive. As a parent, you always want to support your children, even if they’re grown now. But also let them support you when needed. Mutual support can improve the trust and relationship on both sides.

Agree to disagree. Accept that your children are adults now and making their own choices. You may have differences of opinion, but respecting each other’s viewpoints will strengthen the bond. Your role is that of advisor, mentor, and older friend. It’s time to congratulate yourself for raising self-sufficient and high-functioning children.

Establish and respect boundaries. Boundaries are crucial for a successful relationship. Both you and your children can benefit from boundaries from things like unannounced visits and unsolicited advice. Although you may have retired, your children have busy work and kids’ schedules. Your children should also respect your time and schedule. Simple responses like “I’d love to, but am busy today. How about tomorrow or next week?” will work well.

Dr. Kathy McCoy, a psychotherapist and author, suggests setting boundaries, if appropriate, when you speak with your kids. For example, if you sense your adult child becoming impatient when you talk for more than a few minutes, set a five-minute limit to the conversation yourself and stick to it. A busy adult child may be more receptive to speaking on the phone more often when there are time limits.

Setting boundaries can also apply to giving help. What if your children expect continuing help, such as financial help or help taking care of their kids? Repeatedly bailing children out, especially if you cannot afford to, isn’t the basis for a healthy relationship. Healthy adult relationships depend on our ability to say “no” sometimes.

Communication is important in relationships with your children. Take the initiative to address issues in the relationship. Admit any mistakes that were made in the past and move on. Don’t rehash old issues; being defensive or guilty now isn’t helpful. Instead, focus on listening instead of talking, keep an open mind, and be willing to change your viewpoints.

Dr. McCoy offers some additional suggestions:

Be positive and work on being a person your children genuinely want to spend time with. Show appreciation to your children for including you in their lives and keeping in touch. Most people prefer to speak with someone who is joyful and present in the moment than someone who lectures or guilt-trips about not spending more time together.

Use time-saving means to keep in touch, like texting and social media. Although not a substitute for phone and in-person contact, these are ways to maintain a warm connection.

Don’t expect your child to be your best friend. Some things are best discussed with friends your age or with professional counselors. Filling your life with hobbies, interests, and friends can help ensure your happiness doesn’t depend entirely on your children.

This video describes common mistakes parents make with their adult children:

The post Relationships in Retirement appeared first on Smart and Silver.

Seniors are a popular target for hucksters. Their numbers are rapidly growing, and members of earlier generations were generally raised to respect authority and to be polite and trusting, making them easy prey for scammers.

They also often have good credit and sizeable assets – according to the Employee Benefit Research Institute, people age 65 and older have an estimated $8.6 trillion in their retirement accounts, not counting personal savings and pensions.

There are some common-sense rules for avoiding becoming a fraud victim. It boils down to taking your time and doing your due diligence. Even if the person you’re dealing with is someone you know socially, you should beware. Jim and Diane Smart, two active members of the Church of Jesus Christ of Latter-Day Saints in Utah, lost $200,000 to a fraudster whom they knew through their close-knit group at church.

Even trained and experienced professionals can fall victim. Steve Sampler, a licensed stockbroker with years of investing experience, was scammed out of $40,000 by a high-pressure investment salesman.

Contrary to stereotypes, investment fraud victims are very often well-educated with above-average incomes and financial knowledge. Their interest in new ideas and openness to try new things often lead them astray.

Do your own investigation

Scammers exploit the fact that many people don’t do their due diligence, instead relying on the salesperson themselves for information.

There are many resources available to you nowadays to investigate both the person and the company they claim to represent. Do your own independent research and talk with friends and relatives. If the salesperson claims to represent or be affiliated with a legitimate business, contact the business and verify their credentials.

Make sure you fully understand the offer, the background, and the risks. Be especially careful of unsolicited offers you receive in the mail or through email. Remember, if something sounds too good to be true, it’s not true.

Don’t judge by appearances

Fraudsters know how to present a polished, professional appearance. They can make any offer sound like a great deal, with expensive attire, slick presentation materials, polite mannerisms, and friendly gestures. Just because the salesperson and company present a nice appearance doesn’t mean the offer is legitimate. Ruth and Len Mitchell were taken by their accountant, with whom they had a long-standing business relationship.

Take your time

Like Steve Sampler, fraud victims often get rushed into investment schemes with the pitch that “there are only a few left” or “this once-in-a-lifetime opportunity won’t last long”. Take the time needed to research both the offer and the company, and don’t allow the salesperson to rush you into anything.

Watch out for salespeople who exploit your fears

Many retirees worry about having sufficient retirement savings, especially in the face of rising healthcare costs. Fraudsters know to pitch their schemes to appeal to these fears.

“Free lunch” investment scams

Seniors are popular targets of “free lunch” scams. In these scams, the victim is invited with others to attend a free lunch or dinner and then listen to an investment presentation. The victim is guilted into purchasing whatever product is being peddled. Even if the announcement says “nothing will be sold at the presentation”, the victim is subjected to a sales pitch at a later date.

This video tells more about “free lunch” scams and how to protect against them.

Don’t be afraid to complain

If you suspect fraud, don’t let embarrassment, or fear of appearing unable to manage your affairs, prevent you from filing a complaint with federal or state regulatory agencies. This page from the U.S. Department of Justice shows how to report various kinds of fraud.

Protect yourself online

Use a reputable firewall, antivirus, and antispyware software on your computer and keep them up to date. Don’t open attachments or click on links in emails from unfamiliar people, as they might contain malicious software that a scammer can use to take control of your computer remotely or steal information.

Resources

This scam meter helps you determine whether an offer you’re considering is likely to be a scam.

This risk meter can help you determine whether you have characteristics and behaviors that make you likely to become a fraud victim.

Read the Financial Self-Defense Guide for Seniors by the Certified Financial Planner Board of Standards.

View the SEC’s Guide for Seniors for information about investing and investment scams.

Watch this video for some general tips to avoid scams:

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