Documents to Have as You Get Older – Part Two

By Tony Kendzior, CLU, ChFC \ April 27, 2022

Part One appeared last week where I gave you what I consider the five primary documents to prepare and have available as a senior citizen. Here is Part Two.

The premise is that sooner or later you’re going to move into the great beyond, either quickly or after some health issues that sometimes don’t just go away. In either case, the idea presented here is to make it easier and less stressful for loved ones and those you care about as you get older.

What follows assumes you want to minimize the stress faced by your loved ones, which to me means you have told yourself to be relatively organized so you don’t leave a vacuum behind into which family members fall.

Here are the extras that supplement what appeared in Part One. You can probably ignore some of them if what came before touches on the necessary elements for your family. I’ll let you do with this what you will but know that making life easier for others at a stressful time will mean a lot to them.

Guardianship Documents

If you have young children or children who aren’t yet legal adults, it’s crucial that you legally document who should finish raising them and make key decisions about their health, education and more if you no longer can. You may have already thought about who the best guardian for them would be, long-term, such as a sister who lives in another state. You’ll also then need to list who should care for your children in the short-term, perhaps right after your death, before arrangements could be made for your sister to get them. After creating this guardianship document, keep the highlights of this information in your wallet and write out detailed instructions to help the person or people to whom you’d entrust your children.

A Revocable Trust

This document is another level beyond a Last Will and Testament. It allows your loved ones to retain control over your estate while making transfers of assets to beneficiaries. They designate what property (home, investments, jewelry, and so on) goes into the trust and to whom it will be granted. During their lifetimes, they act as executors of their own living trust.

A revocable living trust has an important advantage: it allows an estate to avoid probate at the time of your death. A revocable living trust is one of the single most important documents for older adults, or anyone with assets, to have in their estate plan. It functions as a will, allows their estate to avoid probate, makes a potential guardianship process unnecessary, and gives them control of the assets for as long as they’d like or are able to manage them.

You don’t need to be rich or have vast assets, a life insurance policy, checking account, house, or any asset of value merits establishing a revocable living trust.

There are other important advantages to this type of trust. For one thing, unlike a will that becomes a matter of public record, a trust is private. You may have an issue in your family that you don’t want to disclose to the public at large.

And remember, without a trust, an estate could go through probate, sometime a costly and lengthy process in which the court administers the distribution of the estate. And if the estate holds property in multiple states, it will have to go through probate in each state.

Here Are a Few More Things to Consider

Insurance Policies: Draft a list all insurance policies, life, health, long-term care, home, and cars. Make sure beneficiaries have been assigned as needed and include it with estate planning documents.

End-of-Life Instruction: Include plans for funeral, memorial, and burial services in estate planning documents; average funeral costs range between $7,000–$11,000, so financial arrangements should be made ahead of time. (I have a file on my desktop computer titled End of Life Stuff. My wife and children know it exists and to go there first if I’m the first to leave.)

Authorization to Release Medical Records: The Health Insurance Protection and Portability Act (HIPPA) prohibits doctors from releasing medical information without a patient’s expressed consent; an authorization to release medical records form ensures that physicians can talk to family members about a senior’s medical condition and provide health updates. Go here to find a valid template:

Personal Medical History: Documentation about medical conditions, medications, and allergies helps healthcare providers make faster decisions in the event of a medical emergency.

Long-term Care Plan and Insurance Policy: Including these documents with medical records helps family members plan for the next steps, whether it be assisted living or long-term residential rehabilitation and therapy after a medical event.

List of Bank Accounts: Make a list of all active bank accounts and lines of credit; this makes it easy for a power of attorney to transfer funds and pay bills for their loved one if the need suddenly arises.

Tax Returns: Sometimes necessary to determine eligibility for government benefits for long-term care or housing assistance, tax returns from the previous seven years should be included in your financial documents, as advised by the IRS.

Pension Documents: Documents such as annuity contracts and summary plan descriptions (SPDs) for 401(K) pension plans might be required to verify income, designate beneficiaries, or make financial arrangements of a spouse in the event of sudden death.

Brokerage and Securities Accounts: Documentation of all stocks and bonds holdings are needed to provide a complete accounting of assets and take necessary steps to transfer assets upon death; in some states, you can add a “transfer-on-death” designation to brokerage accounts.

Business Operating Agreements: Family members will be able to resolve questions about a deceased loved one’s ownership, assets, obligations for businesses structured as an LLC or a partnership through business operating agreements.

Property Deeds and Titles: To sell or transfer ownership of property, you need to have the proper deeds and titles.

Loans and Debts: A list of outstanding debts—property mortgages, business loans, vehicle loans, credit card debt—and creditor information will help settle estates and prevent debts from going to collection if a senior is suddenly incapacitated.

Taken all together, all the items described and mentioned in this post and the one that appeared last week can be very intimidating. My intent has been to give you enough information that if you’re so inclined, you can figure out which items are appropriate for you and your family members.

Again, please know the writer, Tony Kendzior, is NOT AN ATTORNEY. You should always consult with someone who is a licensed attorney before you make any irrevocable decisions with legal implications.