Congratulations, you have finally signed your estate planning documents. Now, where do you keep them?
Most people prefer for their attorney to hold the original documents. This prevents these important documents from being misplaced in your house. It also keeps the documents away from meddling family members and nosy house staff.
Due to the high costs of storage and the move to paperless offices, some attorneys are now having their clients hold the original documents. While this reduces the overhead cost for the attorney to handle and store the documents, it leaves the client with the dilemma of where to put the original documents.
If your attorney is in that camp, or if you just prefer to hold the originals yourself, you will need a safe and secure place for them. Here are some options.
Skip the safe deposit box. Do not put the original documents in a safe deposit box because the authority to get into the box is in the box. If you die or are incapacitated and no one else has access to the safe deposit box, they will need court authority to get into the box. To obtain that court authority, they need the documents in the box. It’s like a chicken or egg scenario.
Invest in a fireproof safe. You can keep your original documents in a file cabinet in your home or office, but a fireproof safe is your best bet.
Make sure you have copies. You should also have a set of hard copies in another location easily accessible to you. A safe deposit box is a great place for a set of copies of your documents. Your attorney should maintain a set of hard copies as well.
How frequently you should review your estate plan depends on how old you are and whether there has been a significant change in your circumstances. If you are over age 60 and you haven't updated your estate plan in many decades, it's almost certain that you need to update your documents. After that, you should review your plan every five years or so. But if you're younger, you don't need to do so nearly as often.
Here are a few age ranges and what they mean in terms of estate planning:
18-30 Everyone needs a durable power of attorney, health care proxy and HIPAA release so that they have people they choose to step in and make decisions for them in the event of incapacity.
30-40 Once you begin accumulating assets, get married, and have children, it's important to create an estate plan to care for your loved ones in the event of your death. It also can't hurt to update your durable power of attorney, health care proxy and HIPAA release, since the people you may have appointed at 18 (your parents?) may not be the people you want in these roles at 35.
40-60 Unless there's been a change in your circumstances, and assuming you've set a good plan in place during your 30s, you probably don't need to review your estate plan during your 40s and 50s.
60-70 Once you've hit your 60s, it's time to take a look. Your children are probably grown. You may have grandchildren. And, hopefully, you've accumulated some wealth. The people you appointed to step in in the event of incapacity when you were 35 may not be in a position to assist when you're 65. You may have retired or are contemplating doing so. And, unfortunately, the chances of disability or death increase with every year.
70+ Now it's time to review your plan every three years or so. Changes happen -- to your health and that of your loved ones, to the tax laws, to the programs supporting long-term care or disability care. It's important to have a plan in place and to adjust it as circumstances change.
Change in Circumstances
While the timeline above outlines when you should review and perhaps update your estate plan, it needs to be supplemented by the following potential changes in circumstances that would warrant a review of your plan to see if it still meets your goals and needs:
Marriage. You're likely to want your assets to go to your spouse and to name him or her to be your agent in the event of incapacity.
Divorce. Likewise, if you get divorced, you probably won't want your assets to go to your ex-spouse or to rely upon him or her to step in if you were to become incapacitated.
Children. Once you have children, you'll want to provide for them and to name someone to step in as guardian in the event of your death or incapacity and that of their other parent, if any. Generally, once you have a plan in place you do not have to update it unless you have more children.
Disability. If you or someone who would inherit from you becomes disabled, you will need to plan to protect and manage your assets, whether for yourself or for your beneficiaries.
Wealth. If you accumulate sufficient assets to exceed the thresholds for state and federal estate taxes -- $11.4 million federally -- you may want to plan to reduce or eliminate such taxes.
Moving. If you move to a new state or country, it will be important to have your estate plan reviewed to make sure it works in the new jurisdiction.
In short, until you reach age 60 or 70, reviewing your estate plan every five years probably is overkill. But do so whenever you have a change in circumstances such as those listed above. If you're over 60 and haven't updated your estate plan in many years, now's the time. Then, having a review every five years is definitely a good rule of thumb.
“While a longer life is a good thing, it will also present challenges – and unfortunately, sometimes financial predators.”
The prospect of a long, healthy and active life is a wonderful thing to consider. However, one in 10 seniors have suffered financial abuse, according to TheKansas City Star’s article “Five ways to avoid elder financial abuse.” The grandson of Brooke Astor spoke at a conference about how his grandmother’s last years were spent living in squalor, as a result of her son and guardian stealing from the estate and cutting the amount of money available for her care. The grandson and his brother sued their father to protect their beloved grandmother, a leading philanthropist and one of New York’s high-profile society figures.
However, elder financial abuse is not limited to the super wealthy or socially prominent. One report noted that one in ten seniors suffers some form of financial abuse.
Why does this happen?
As we age, our brain also ages making us more susceptible to making poor decisions. Even high-functioning retirees with no outward sign of dementia, find it harder to distinguish safe investments from risky ones. The probability of dementia also rises as we age: only 7% of people over 60 have dementia, but nearly 30% of people over age 85 have some degree of dementia.
Here are some suggestions to minimize the likelihood of financial elder abuse:
Communicate. Talk with your loved ones on a regular basis, so you know how their health is and what they are doing. If they don’t want to talk about money, you can start the conversation by sharing something about your own situation. Remind them about safe practices like shredding receipts, bills and account statements. Remind them not to open emails from people they don’t know and not to give their Social Security number or account numbers on the phone or online to people they don’t know.
Stay involved. Know how your loved ones are spending their time and money, by staying involved in their lives. If they are hiring people to do work on or in the house, know who those people are and check their backgrounds. Get to know their home healthcare aides. Review their bank statements to ensure no unusual activity is taking place. If you see that they are starting to decline, offer to take over tasks for them.
Check and balance. Make sure that the correct estate planning documents are in place to allow trusted family members to help, if the need arises, such as power of attorney and medical directive. Divide up responsibilities; consider having one person in charge of bank accounts and another in charge of investment accounts. Trade responsibilities every few months.
Have a relationship with their professionals. Attend meetings with their estate planning attorney and their financial advisor. If there is any hesitation on the part of the professional, push back: any qualified estate planning attorney or financial advisor or CPA should welcome family involvement.
Streamline accounts. Fraud is harder to see, when there’s money in multiple financial institutions with multiple advisors and life insurance policies from several different brokers. Spend the time to do a complete inventory of all accounts. If you can, consolidate accounts.
長壽，健康和積極的生活前景是一個值得思考的好事。然而，根據 The Kansas City Star的文章“Five ways to avoid elder financial abuse”，十分之一的老人正遭受經濟虐待。Brooke Astor的孫子在一次會議上發表講話，談到他的祖母過去幾年如何生活在惡劣環境中，她的兒子和監護人偷了她的資產並減少用於照顧她的錢。這位孫子和他的兄弟起訴他們的父親，以保護他們心愛的祖母，她是一位慈善家先鋒和紐約一位備受矚目的社會人士。