Your Next Chapter: Estate Planning Considerations for the Newly Retired

Congratulations on your retirement!  Like many, you probably have a bucket list of things you would like to accomplish such as travel the world, spend more time with your grandkids and take up a new hobby.  While these are all excellent ambitions, the milestone of retirement is also a good time ensure your finances, beneficiary designations, estate planning and long-term care strategy is in proper order.  The following are some bucket list additions the newly retired should consider: 

1. Create an inventory of all your assets, accounts, safety deposit boxes, retirement accounts, beneficiary designations and digital assets. 

Throughout your life you have accumulated a variety of assets that are held in different ways.  Creating an inventory of all your assets will not only help you prepare to meet with a financial advisor or estate planning attorney, but will also be invaluable to your family and/or spouse in the event you are unable to handle your own finances or pass away.

2. Review your monthly income needs and create a budget for your expenditures. 

One of the most obvious changes in lifestyle after retirement is your monthly income.  It is important to make sure that you have reviewed and made any necessary Social Security and/or Pension elections, and determined the Required Minimum Distributions (RMDs) you will receive from your retirement assets (IRAs/401ks) on a monthly or annual basis.  Qualified monies typically do not require the RMD be taken until age seventy-two (72).  That being said, your monthly income needs may require taking the RMD from these accounts early.  This decision, along with your Social Security and Pension elections should be reviewed with your financial advisor, plan administrator or perhaps an individual who specializes in optimizing Social Security and retirement elections.

3. Meet with an Estate Planning and Elder Law Attorney

Ensuring your estate planning documents are updated is crucial during this next chapter of your life.  You will want to make sure that you have designated an agent to make medical decisions for you in a Health Care Proxy, along with an agent(s) to make financial decisions for you in a Power of Attorney, in the event you are unable to make said decisions yourself.  Your Last Will and Testament and if you prefer, a Revocable Living Trust should be created or updated so as to ensure you have taken advantage of all estate planning options available to you and have properly named the beneficiaries, executors and/or trustees in accordance with your wishes.   If your assets are held in a revocable and/or irrevocable trust, upon your death you will avoid the need of a probate proceeding.  Having a trust can also allow for ease of transition to those you want handling your affairs in the event you become incapacitated and can no longer manage your affairs.  In addition to avoiding probate, an Irrevocable Medicaid Asset Protection trust can be used in order to do Medicaid Planning. 

4. Engage in long term care planning 

Engaging in long term care planning will help you determine if and how you will be able to pay for the cost of your long-term care, in the event you need assistance in your home (a home health aide) or in a facility (assisted living facility or nursing home).  Paying for long term care can be done in a variety of ways, including by using your life savings, using long term care insurance, or taking steps to become eligible for Medicaid benefits.  Having a conversation in with an Elder Law attorney may be beneficial to determine what your exposure to the cost of your long-term care is, and what steps you can take to minimize said exposure. 

Lauren C. Enea, Esq. is an Associate at Enea, Scanlan & Sirgnano, LLP.  She concentrates her practice on Wills, Trusts and Estates, Medicaid Planning, Special Needs Planning and Probate/Estate Administration. She believes that it is never too early or too late to start planning for your future and she enjoys working with individuals and families to ensure that their estate and long- term care plan best suits their needs. Ms. Enea is on the executive committee of the New York State Bar Association (NYSBA) Elder Law and Special Needs Section and is also the Co-Editor of the NYSBA Elder Law and Special Needs Section Journal.  She is admitted to practice law in New York and Florida. She can be reached at (914) 948-1500. Visit in-person at 245 Main St Suite 500, White Plains, NY 10601 or online at www.esslawfirm.com.