There is an old adage that states, “Life can’t go according to plan, if you don’t have a plan.” This rings true when you think about later life planning. Planning for later life issues is not only; such planning can give you control of your affairs while you are living and after your death. When preparing for the discussion about later life, one crucial topic to focus on is your finances.
When determining the future of your finances, you will want to create a plan so that you know what resources will be available to you and your family. This knowledge will help shape decisions on things such as living arrangements and medical care. One such plan is a retirement income plan, outlining your anticipated income and expenses. To figure out if you will outlive it or not, you should also analyze your nest egg savings. When creating this plan, it is recommended that you hold off on receiving your social security benefits for as long as you can.
Another important aspect is to plan for role reversal. There may come a time when someone else will need to take over the responsibility of paying your bills and managing your assets. Deteriorating health, mobility, and cognition may result in a change in the handling of your finances. Unfortunately, all too often, when a health crisis occurs, an older person is faced with the fear of losing their independence. As a result of this fear, they recant what they previously expressed as their wishes. This wavering can result in a burden and stress on your loved ones. It can make them wonder if they are doing what is right for you. This lack of clear communication can also result in turmoil within your family.
As part of your plan, it is recommended that you choose a financial power of attorney. This document allows you to name a trusted person, to handle your financial matters if you become unable to manage them on your own. Durable powers of attorney for finances are mainly preventive documents. If you don’t have them and you become mentally incompetent, a judge will have to appoint someone to manage your finances for you—even if the appointee is unfamiliar with you or your money matters. Ohio Legal Help is an excellent resource with forms to help you designate your financial power of attorney.
It is never too early to start planning for your future. Drafting documents before a crisis occurs, such as advanced directives, can prevent the discomfort of family members and make the end of your life more enjoyable for the entire family.
Written by: Kathy Tutt, Family and Consumer Sciences Educator, Ohio State University Extension, Clark County
Reviewed by: Laura Halladay, Family and Consumer Sciences Educator, Ohio State University Extension, Greene County
References:
Ohio Legal Help, Financial Power of Attorney Form, https://www.ohiolegalhelp.org/letters-forms/fpoa
Prosch, T. (2014). The Other Talk: A Guide to Talking with your Adult Children About the Rest of Your Life. United States: McGraw-Hill Education.
Scholten, G., Bourguignon, S., Delanote, A., Vermeulen, B., Boxem, G.V., & Schoenmakers, B. (2018). Advance directive: does the GP know and address what the patient wants
Tutt, K. (2022). The Gift of Planning, Retrieved from https://livehealthyosu.com/2022/12/05/the-gift-of-planning/
If you are lucky enough to have elderly parents, you know what a precious gift it is to have them. However, with this precious gift of time, there are some challenges that occur as they age and need your help. It is difficult when the roles of parent and child begin to shift and the children become the caregivers. One of the most complicated issues is when there is a need to take over your parents’ finances. Taking control can be awkward and complicated, but putting it off too long can make it very difficult to sort out all of their accounts and make the necessary legal steps to ensure your ability to successfully manage your parent’s money.
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