Essential Legal Documents For Retirement Planning

Essential Legal Documents for Retirement Planning

Updated on Aug 09 2018


Preparing for your future retirement needs includes drawing essential legal documents you and your loved ones will need if there’s ever a time when you’re incapacitated or no longer able to make sound financial or medical decisions.

A person with dementia needs a trusted relative or friend who can make important financial and medical decisions on his or her behalf. It’s critical to assign this job while the person with dementia still has the mental ability and legal capacity to be involved in making the choice. Here are the documents you’ll want to complete

The Aging, Demographics, and Memory Study backed by the National Institute on Aging figures that 14 percent of Americans age 71 and older have some form of dementia and the Chicago Health and Aging Project estimates that nearly one-third of people 85 and older have Alzheimer’s. These sobering percentages are likely to worsen with the longevity revolution. The reality is that not enough families are open about the topic of managing money and deteriorating faculties with age.

Advance planning will help alleviate a lot of stress when your loved one can no longer manage his or her finances. If possible, get organized ahead of time to make sure someone has durable power of attorney, or the authority to make financial decisions on your loved one’s behalf if he or she becomes incapacitated. If you don’t get legal specifications handled in advance, there will be many legal hoops for your family that will not only take time and be expensive but will also heighten emotion during an already intense time with expensive healthcare costs. 

Here are the documents you will want to get in order with the help of a local certified elder care attorney who understands the relevant state’s laws and regulations:

Durable Power of Attorney

A power of attorney gives you the authority to make financial decisions for someone else, such as signing checks to pay bills, handling tax returns, and selling a home. Unlike a general power of attorney, a durable power remains in place if the person for whom you are making decisions becomes incapacitated and can’t make decisions for himself or herself. A regular power of attorney ends if the person who issued the power of attorney becomes incapacitated.

Health Care Proxy

This is essentially a power of attorney for medical decisions. It allows you to make choices about treatments, doctors, and other health-related matters.

Living Will

Also known as an advance directive for health care, a living will lets your loved one specify the medical treatment that he or she wants—or doesn’t want—near the end of life.

Updated Will

A will dictates what happens to any of your family member’s assets after his or her death.

Living Trust

If your loved one with dementia has substantial assets, a living trust makes it easier for a someone else to manage the assets, such as homes and investment accounts. The agent or trustee must follow the specific instructions of the person who created the trust, which can contain all of a person’s assets other than IRAs and 401(k)s, which can only be owned by an individual.


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