The gift of preparation
What your loved one needs now, what you’ll need later
Over 75% of all caregivers are women, according to the Institute on Aging. Even while working full time, you may be one yourself. If so, you’ve likely seen firsthand the shifts that come with aging and understand the greater need for support we’ll all likely need as we grow older. You’ve probably also realized that supporting your loved one relies on having an understanding of their preferences about medical care, personal belongings and end-of-life decisions, as well as documentation so you can help fulfill their wishes. Consider these steps to ensure you have the information you need to provide the best possible care, or to help others understand your needs as you reach your later years.
Start with some questions
To get a dialogue going, consider questions around quality of life – the things that will define how we live as we age – before there’s a critical reason.
For example, consider:
Who: Who will you spend time with? Who will take care of you should you need help with daily living activities or more extensive care?
What: What are your health limitations? Does your family have a history of medical conditions? What would treatment cost?
Where: Where do you want to live? Will your home need to be modified?
When: When are you planning to retire? Will you have enough saved to live the lifestyle you desire?
How: How will you get around? Do you want to live near places and people that are most familiar to you?
Put it in writing
As you have conversations – document, document, document. Here’s a look at some of the paperwork of caregiving, with an eye toward what your loved one needs now, and what you’ll need later.
Contact authorization form – Authorizes a third person, say a financial advisor or attorney, to communicate with a designated contact person if there are questions or concerns regarding health status, including mental capacity.
Last will and testament – A legal document used to distribute property to heirs, specify last wishes, name guardians for minors, and identify who is responsible for managing the estate and implementing wishes. Every adult needs one, or the state will step in to make these types of decisions.
Separate writing/tangible personal property memorandum – A separate writing/tangible personal property memorandum can be used to supplement a will. This document dictates distribution of small tangible personal property such as jewelry, collectibles and artwork.
Durable financial power of attorney – A durable power of attorney gives someone authority to handle financial and legal decisions. Of course, the person selected needs to be someone who will represent your best interests.
Living trust – In many states, a living trust can be used to transfer assets and personal property in an orderly and more private manner than a will, and can even stipulate provisions for the bequests. It also can help avoid a costly and stressful probate court process and may offer substantial tax benefits.
Durable medical power of attorney – A healthcare proxy or durable power of attorney (sometimes known as an advanced directive) is a person who makes medical decisions for someone who is not capable of doing so.
Living will and medical directives – This specifies what type of medical treatment is acceptable to sustain life if one is terminally ill or in a vegetative state and unable to communicate wishes for treatment.
POLST form – A Physician Order for Life Sustaining Treatment (POLST) is for those with serious illness or frailty to specify preferred healthcare treatment in an emergency medical situation.
DNR/DNI order – A doctor’s order that tells all other medical personnel not to perform CPR if you go into cardiac arrest (Do Not Resuscitate) or place a breathing tube (Do Not Intubate).
HIPAA form – Allows medical providers to release health records to those given consent.
Policies of protection
Life insurance – Life insurance helps ensure that loved ones will be financially protected after a death.
Disability insurance – Most disability policies replace a percentage of earned income when the policyholder can’t work due to illness or injury.
Long-term care insurance – Designed to pay for the cost of care in a variety of settings, including a nursing home.
Beneficiary forms – For insurance policies, retirement accounts and some other assets, the beneficiary form prevails over the will.
Letters of instruction – An informal, non-binding way to share any wishes not covered by a will (e.g., the needs of minor children or whether to donate organs).
Ethical will – An ethical will preserves family history and imparts important values, life lessons and faith to the next generation.
List of contacts – A detailed list of people to contact in certain circumstances, including family, friends and the professionals who oversee legal, financial, insurance and health matters.
- Schedule a family meeting to get the conversation going with your loved ones about their preferences and concerns.
- Have you updated your will or beneficiaries recently? Make sure important documents are current.
Work with your financial advisor to ensure potential costs of care for your loved ones, or yourself, are incorporated into your financial plan.
Rise of the female breadwinner
More women have become economic forces within the modern workplace
All of those college degrees women are earning these days and the evolution of family structure have contributed to a mom phenomenon: Mothers contribute almost $1 trillion to the U.S. economy according to data from the U.S. Census Bureau’s 2015 survey. Further, the Senate’s Joint Economic Committee reports that women provide nearly 40% of household earnings for families with working mothers.
Women have become a major economic force, changing the modern workforce and making up 47% of all workers. Today, 70% of mothers with children under the age of 18 are working – up from 47% in 1975, says the Bureau of Labor Statistics.
So, what does this mean?
For starters, the increase of women in the workforce has fueled U.S. economic growth. The economy is 13.5% bigger than it would have been if women hadn’t increased the time they spent working for pay since the 1970s, translating to an additional $2 trillion in gross domestic product, according to the 2016 Economic Report of the President. What’s more, a study from the McKinsey Global Institute found that $12 trillion could be added to the global GDP, the value of all the goods and services produced in a country, by 2025 by advancing women’s equality in our society and the workplace.
Working mothers also have a positive influence on their children, according to a study by Harvard Business School. The survey showed that daughters of working moms earned 23% more than those of stay-at-home mothers, and sons were more likely to help with housework and spend time caring for children and family as adults.
Finally, many of these breadwinner women are leading their family’s financial futures. In a recent study by Allianz Life, 53% of women said they are responsible for managing their household’s long-term savings and investments. Further, 67% of women reported that becoming more knowledgeable and involved in managing their finances made a difference in their quality of life. [AC1]
Chances are you or someone you know is among these working women who help strengthen the economy, inspire a generation of children and take charge of their family’s financial well-being. It’s a tough job, but the rewards are many.
- As you advance your career, be sure to also boost your retirement plan contributions.
- Expand your network by researching local professional organizations and industry events.
- Work with your financial advisor to ensure your money is working as hard as you do.
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“No kids” shouldn’t mean “no estate plan”
Key steps for planning your estate, no matter your circumstance
Estate planning can sometimes feel overwhelming for individuals without children or close family members. You may not know who should receive your estate, who should be the executor of your will, or whom you should trust with important decisions should you become incapacitated.
Not knowing the “perfect” way to craft an estate plan may lead you to do nothing at all – but this is a huge mistake, regardless of the size of your estate. Remember, if you pass away intestate or without a will in place, your assets and property may fall to the direction of state statutes and probate courts.
While estate planning can raise difficult questions – even for people with family ties and close friends – there are a few key decisions you should make right away, even in the face of uncertainty:
Choose an executor for your estate. Options exist beyond family members and friends, including lawyers, banks and other planning professionals.
Create a living will. The document states your wishes should you be placed on life support or suffer from a terminal condition. Having it in place ensures that your physicians are aware of the action you want taken in the face of difficult end-of-life decisions.
Name a healthcare proxy or power of attorney. He or she will be tasked with making decisions about your health in scenarios not covered by your living will. As with your executor, you have the ability to ask a non-relative, such as a third-party professional or clergyperson, if they’re willing to accept the responsibility.
Select beneficiaries for your 401(k) plans and life insurance policies. These won’t pass through your will, so you need to be clear about where you want your assets to go.
Having these decisions in place is an important first step to ensuring your estate is left the way you intend, regardless of familial ties – and be sure to review your selections regularly in case your circumstances change.
Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.
- Make a point to update the beneficiaries on your 401(k) and life insurance policy annually.
- Having trouble deciding who should receive your legacy? Consider tying your assets to charities you’re passionate about.
- Need an estate executor and/or a healthcare proxy? Your advisor can help you select appropriate representatives.
Material prepared by Raymond James for use by its advisors. Raymond James is not affiliated with any companies mentioned in this material.