The fact that Americans are living longer makes estate planning increasingly important because the cognitive decline that often accompanies aging may make it difficult for an individual to handle his or her finances. In fact, such problems mean that Michigan families should have a discussion about estate administration before such a decline happens.
There are several common warning signs among individuals experiencing declining cognitive function. A National Endowment for Financial Education study asked individuals if they or a family member had experienced any of those common problems. It found that 47 percent paid bills late or didn't pay them at all; 36 percent found it difficult to perform simple math problems; 35 percent have made irrational purchases; and 21 percent have emptied their savings accounts entirely.
Even millionaires worry over aging and finances: A Spectrem's Millionaire Corner survey found that 44 percent said they were worried about being taken care of as they age, with 52 percent concerned about spending their last years in institutional care. Although 34 percent of the millionaires said that they wanted help with estate planning from their financial advisor, they still were reluctant to discuss how their assets would be administered if mental aging leaves them unable to manage their own finances.
NEFE suggests that people gather information about medical issues that might be causing cognitive decline and share it with family members. They also advise making a financial inventory and obtaining a power of attorney. Then, it is important to implement a plan for someone to monitor financial accounts and be ready to step in and take over if necessary.
No one likes to think about making provisions for their own death. However, they might want to talk to an estate planning attorney about creating an effective estate administration plan. It can protect them if they become incapacitated while alive as well as provide for the disposition of their estate when they die.
Source: Millionaire Corner, ""Major Barriers" Preventing Families from Estate Planning: Survey", Donald Liebenson , August 14, 2013