Tag Archives: Estate Planning. End of Life Care

Digital Assets

By Larry Luxenberg  

Digital assets are usually dismissed as a futuristic concern. But every estate I’m involved with now has at least some digital components and they are usually needlessly troubling. We spend much of our lives now in the digital world whether it’s on email or Facebook, Instagram or Twitter.

If we have a small business or a profession, some of the value of our business is certainly wrapped up into the digital world.

Last night I spoke to the Rockland County Estate Planning Council (http://www.rocklandcountyepc.org/   about the growing importance of planning for digital assets.

With many of us this might be small — airline points or deposits at paypal — but for many estates this could already be a big number. Most of us have trouble from time to time accessing our digital accounts. Imagine how difficult it will be for an executor to do this.

A good first step is to make an inventory of your digital assets and accounts and then figure out how an executor might access them. You can give such a person separate authority to act on your digital accounts.

This is not accepted in every jurisdiction but in the fast changing digital world, this is a good first step.

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Preparing Your Estate

By Larry Luxenberg  

Prosperity and cyberspace have combined to make dealing with estates more difficult than in previous times. Rather than leaving a mess behind — the proverbial shoebox of unorganized documents  — one can make the task of heirs a lot easier some simple and easy steps. Put together a list of all of your financial accounts, the institutions where they are held, current balances and contact information. Add to that list the professionals you deal with and relevant passwords. Many people accumulate a hodgepodge of accounts, insurance policies and other assets, some with small balances, and it’s easy for someone not familiar with these accounts to overlook some. The guesswork at an emotional time to piece together someone’s financial life can be daunting even if you do manage to find everything. Many do not. Evidence of that is in every state capital where abandoned or lost accounts total in the billions. Some simple steps can space loved ones a lot of grief so don’t put this off and leave a mess behind.

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Aging and Financial Decisions

By Larry Luxenberg  

Most of us expect that as we age, our capacity for making complex financial decisions diminishes. A professor at Texas Tech, Michael Finke, has compiled research that supports this supposition. From my own experience working with elderly relatives and clients, I believe this to be the case. Most of the “old old” that I’ve dealt with haven’t had the capacity or perhaps the interest in these complicated matters. For many, they simply don’t want to tackle these issues. They are more likely to want to visit with family and friends or pursue their passionate interests or merely handle the tasks of getting through the day. It’s important that we prepare for this stage by designating a trusted relative, friend or professional to step in and handle these matters when we no longer are capable of doing so  at the level we were in our peak years. A decline in skills may be combined with more difficult issues such as the onset of early stage dementia, paranoia or other cognitive impairment. There is no way to sugar coat the difficulty of living through or taking care of someone who is afflicted. But at least if we prepare for the typical decline or even worse issues we can prevent needless financial devastation as well.

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Aging and Financial Skills

By Larry Luxenberg  

 

Diminished Ability to Handle Personal Finances

As people age, they gradually lose their ability to handle their own finances. Often, this process is so gradual that the person himself and those around him are unaware of what’s happening until something serious happens. The elderly control the most assets and are the most susceptible to financial scams and poor choices. As people get older, their financial affairs often get more complex. They must deal with complex choices on healthcare, long-term care, taxes, life insurance, pensions, Social Security and estate planning. Often just handling the routine chores of daily financial affairs become beyond reach. Recently The New York Times had an article discussing the research behind the loss of cognitive skills needed for personal finance. Steps to mitigate these inevitable problems include striving to simplify your financial affairs — consolidating your holdings in a small number of financial institutions, trimming your actual number of holdings, avoiding complex or exotic instruments. Another common solution is to use automatic bill paying where possible. People should also find trusted family members, friends or professionals who can step in when needed. Appropriate advanced directives such as powers of attorney and health care proxies also need to be in place. Planning for the inevitable will help avoid many of the worst potential pitfalls.

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Passing Along Your Assets

By Larry Luxenberg  

Most people devote far too little time to estate planning. It sounds like something only the very rich should do and even they ignore it as much as possible. Everyone should have a will and advanced directives — health care proxy, power of attorney, living will. While seniors are more likely to need these documents, anyone can be the victim of an accident or health emergency. Beneficiaries on IRAs and other retirement accounts and insurance policies should be reviewed periodically. Lacking the planning and documents, one can find his choices constrained or lacking in an emergency. Even with the proper planning and documents, it’s hard enough to handle end of life events or mid-life emergencies. Without the documents, it can be pure misery for caretakers and survivors and the best of intentions can be thwarted. I’ve yet to have a client say he would prefer to pass along extra money to the IRS or state tax departments rather than give the money to his family. But if the right planning doesn’t occur, paying unnecessary taxes happens all too frequently. At the same time, a patient’s wishes for care may not be implemented because the intentions weren’t documented or put in the hands of a trusted family member or friend. While unpleasant to contemplate, avoiding these topics can lead to unpleasant consequences. One recent article touching on end of life care was by Jane Brody in the Feb. 10, 2015 New York Times. http://well.blogs.nytimes.com/2015/02/09/know-the-hard-choices-prolonging-life-entails/?_r=0

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