​Do you have a plan to manage incapacitation? It’s a risk that could be reality for many retirees. Incapacitation is the inability to make or communicate your own decisions. It’s often caused by cognitive disorders like Alzheimer’s, but people also become incapacitated because of strokes, cancer or other conditions.
 
Incapacitation may not seem like a high planning priority, but it’s too important to ignore. If you don’t have a plan, your family could face legal and financial challenges during your incapacitation. You may have people making decisions on your behalf whose wishes don’t necessarily align with your own.
 
Below are a few different costs and consequences that can come from incapacitation if you don’t have a plan in place. Incapacitation may not be a likely scenario, but it is possible, especially if you’re entering retirement. Now may be the time to develop a strategy.

Financial
 
One of the biggest challenges of incapacitations is that it limits your ability to manage your finances. The bills don’t stop just because you’re struggling with medical problems. If you’re married, your spouse will likely be able to handle bill payments, investment management and more. However, he or she could have trouble with accounts that are only in your name.
 
If you’re not married, there could be more complicated issues. A grown child or other family member may need to manage your bills and income. You may not want that person delving into your financial affairs. It’s also possible that the person may be someone who doesn’t have your best interests at heart.
 
You can minimize these risks in a number of ways. One is to utilize joint accounts whenever possible, especially if you’re married. At a minimum, keep your spouse informed about your various accounts, bills and income sources.
 
You also could put certain assets in a living trust. You’d name yourself as trustee and another person as successor trustee. If you ever become incapacitated, your successor trustee takes over management of the trust assets.

Legal
 
There could also be legal ramifications to your incapacitation. Even if you’re covered by health insurance, many insurers may not agree to coverage for certain procedures without consent from the primary party. Obviously, if you’re incapacitated, you can’t provide consent or guidance.
 
In that case, the insurer may wish for someone to become your guardian or power of attorney. That usually requires legal documents, court hearings and more. It can be especially complex if your family can’t agree on who should fill that role.
 
Again, you can eliminate this confusion with a little advanced planning. A power of attorney is a document that designates another individual as your decision-maker in the event you become incapacitated. That way you know who is making decisions on your behalf, and you can communicate your wishes to that person.

Personal
 
The personal impact of incapacitation is often the most significant cost for families. Your health issues could create an emotional and traumatic period for your family. They could be struggling with logistical challenges, health care costs, and stress about your wellbeing.

It’s possible that your family members may not agree on the best course of treatment or how your finances should be managed. Multiple people may feel that they should be in charge. Because the issue is already emotional, it’s not difficult for these conflicts to become heated.
 
Probably the last thing you want is for your loved ones to fight or argue because of your health issues. Incapacitation planning can minimize this risk and provide clear instructions to your loved ones. That way they can spend less time arguing about decisions and more time supporting you and one another.
 
Ready to develop your incapacitation plan? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18089 – 2018/10/2

​A comprehensive financial plan takes into account all aspects of your financial life, highlighting how one part — and even just one decision — can affect the others. Think of it as a money ecosystem with a “butterfly effect.” Such a plan illuminates your entire financial system, highlighting interactions and allowing you to make informed decisions. 
The ABCs of a Comprehensive Financial PlanComprehensive financial plans are characterized by clarity and prioritization. One conundrum many people struggle with is funding conflicting goals that overlap. A great example is retirement and saving for a child’s college education. In this type of situation, questions that typically spring to mind include:

• How do you decide which goals to pursue?
• How much savings do you allocate to each goal?
• What savings time period is best for these savings goals?
• When do you start?

When you develop a comprehensive plan, you spend time examining each of these goals to determine the proper priority within your personal life vision. This complete process helps you make more informed decisions about how to save and spend. 

Read the rest of my article here in the leader of personal finance news and business forecasting magazine Kiplingers.

​Are you considering your legacy and how to distribute your assets after you pass away? Perhaps you want to fund your grandchildren’s education or help your grown children get started on their retirement nest egg. Maybe you have assets that hold sentimental value that you would like to distribute to specific relatives.
 
An estate plan can help you accomplish these goals and more. Your estate plan should prioritize your objectives and offer a strategy. It should also identify risks and challenges, such as taxes, end-of-life costs and even probate expenses.
 
One potential risk is the existence of debt. Many retirees try to minimize debt before they end their career. However, that’s not always possible. Unexpected costs always arise, even in retirement. You could have credit card debt, mortgages, medical bills and more.
 
Any leftover debt could reduce the amount of assets that go to your heirs. When you pass away, many of your assets will likely pass through a process called probate. That’s the legal process for settling an estate, and it often includes notifying heirs, liquidating assets, distributing inheritances and other tasks.
 
Paying final debts is an important part of probate. Your creditors could actually file liens and judgments against your estate, tying up your assets and restricting the distribution of your funds.
 
Fortunately, there are steps you can take to minimize the burden of your debt and protect your legacy. Below are three steps to consider. If you have debt and are worried about its impact on your estate, consider implementing these action items in your estate plan.

Reduce your debt levels.
 
Perhaps the most effective way to limit the impact of debt on your estate is to take steps to reduce your debt while you’re alive. For example, if you have credit card debt, consider developing a strategy to pay it off. If you owe back taxes and penalties to the IRS, contact the agency to negotiate a payoff plan.
 
Also, think about loans on which you may be a co-signer. For example, did you co-sign your children’s student loans? If so, the lender could demand that the balance be paid after your death. You may want to work with your child and the lender to see if you can be removed as a co-signer so the balance doesn’t hold up your estate distribution.

Provide liquidity to your estate.
 
Sometimes it’s not the debt that causes estate problems, but rather the illiquidity in the estate. An individual may pass away with medical debt, credit card debt or other loans. The person’s assets may be illiquid property, like real estate or collectibles. There may be few liquid assets available, such as cash or investments.

In these cases, the estate executor may be forced to sell assets to generate cash to pay the debt. That can be especially difficult for heirs if the assets have sentimental value. You can minimize this risk by creating liquidity for your estate. Consider using life insurance as a tool to leave cash for your heirs. If you can’t qualify for life insurance, work to create a reserve of cash.

Protect your assets from creditors.
 
You also may want to utilize tools that offer some protection against creditor action. Many of these tools are beneficiary-designated products such as life insurance, annuities, IRAs and trusts. Depending on your state laws, these types of assets flow directly to the named beneficiaries without going through probate. You may want to maximize the assets in these accounts so your heirs can receive their distributions quickly, without waiting for your executor to settle outstanding debts.
 
Ready to protect your loved ones? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and create a strategy. Let’s connect soon and start the conversation.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18086 – 2018/10/1