Essential Steps for Getting Your Affairs In Order (the Sooner the Better)
Written by TYE Medical on Feb 24th 2023
Organizing and getting your affairs in order as a senior probably won’t be a pleasurable experience, but it is a necessary one. It won’t be the most fun conversation you’ll ever have with those closest to you, but it will benefit everyone. For your own peace of mind and for the good of your loved ones, having your documents and financial affairs organized and accessible is a priority. It doesn't mean you’re ready to jet out of this world, but it does mean that while you have the time and ability, you can make everyone’s life easier.
And it also means that you can be clear and intentional about your wishes and planning. Communication, both written and oral, is essential to ensure your desires are met and that your loved ones know how to proceed with ease when you can’t speak for yourself or aren’t here to do so.
Your family might not initiate this conversation, because it’s something they won’t want to think about either. It can also be an awkward conversation to start, especially for them. But if you have these guidelines and tips to follow, you can feel more confident as you approach this sensitive and essential topic with them.
1. Organize Your Finances
Before you can get your affairs in order, you must fully understand where you are financially. And if you’re involving an advisor or a loved one, this will be key for them. Identify all your financial accounts, including:
- Bank accounts
- Retirement funds
- Health savings accounts
- Investment funds, etc.
Compile a list of account names, locations, and account numbers. Additionally, it’s a good idea to itemize your current monthly income and expenses. If you have a mortgage or other large liability, include the account number and debt holder.
Once you have these important items organized, share the information with one or two trustworthy people close to you. Often this is a son or daughter. Even if you have a financial or legal advisor, it’s a good idea to share this information with a close friend or family member.
2. Gather Your Legal Documents
Having your financial affairs in order is a great start and very helpful to your family. But ensuring you have everything in place legally is perhaps even more important. Organization without delegating authority to manage it can leave your family with their hands tied.
Here are some legal matters to consider:
- Wills and trusts
- Power of attorney
- Advance directives
It’s best to consult an attorney about these details. You may not require an attorney for a general will, but for the rest of these legal matters, professional advice is recommended. And be sure to understand the specific laws concerning your state since they often vary.
If you already have these documents, it’s time to collect and label them. Store them in the same place as your financial documents. It’s generally recommended that you also make copies and leave them with key people.
Wills and Trusts
These documents declare who receives your money and property after you die. A will is the most basic set of instructions you will leave behind. A trust on the other hand allows your assets to be legally held by a third-party financial institution. The advantage is that you have specific say over how and when the funds are distributed to chosen beneficiaries. It can also help your beneficiaries avoid legal red tape, delays, and probate courts, gaining access to assets more quickly.
Powers of Attorney
You can give power of attorney in different ways, each of which allow someone you trust to act in your place under specific circumstances.
General Power of Attorney
Allows the person of your choosing to legally make decisions and act on your behalf, but it ends if you are ever unable to make your own decisions.
If you need help with things like filing tax returns, paying bills, borrowing money, etc., you want to give someone you trust power of attorney so that they are legally allowed to manage these areas for you.
But if you want someone to handle legal and financial matters if you are incapacitated, then you should consider a durable power of attorney.
Durable Power of Attorney
Also allows you to choose someone to act on your behalf regarding legal matters but it remains in effect even if you are unable to make decisions. Without this authority, your family may have to wait weeks or months before gaining legal permission to make decisions for you.
You will also want to consider designating a power of attorney for health care, which will be discussed in the next section.
3. Finalize End-of-Life Directives
Also known as “advance directives,” it's an important detail to consider as you get your affairs in order. And frankly, most people should set these directives in place long before they typically do.
What happens if you get sick and can’t make medical decisions for yourself? What if you need someone to speak for you who has your best interests at heart? This is when you and your family will be thankful for existing advance directives.
In certain circumstances, it can be helpful to discuss your end-of-life preferences with your doctor, and they may have specific advice related to chronic health conditions you might have.
Living Will
This allows you to make your wishes known even if you are too sick to do so. In a living will you can voice what type of medical care you are willing to receive and the type of care your are opposed to.
For example, many people give instructions concerning when or if medical professionals should use “extraordinary measures” to save their lives. How do you feel about life support? At what point would you want to be removed from life support? These are issues that can be addressed in a living will. In many cases, this takes the burden off of families who may find it difficult to make these sensitive decisions.
Durable Power of Attorney for Health Care
Even if you have a living will, you will need someone to make medical decisions for you when you’re not physically or mentally able to do so. But it’s important to name a person who is comfortable with making difficult and emotionally stressful decisions.
4. Organize Your Insurance Documents
Eventually, both you and your family will need access to your insurance policies. Compile a list that includes the company name and account number. Identify which types of policies you have, including any of the following:
- Life
- Health
- Long-term care
- Auto
- Homeowners
Ensure all your policies are up to date and make any necessary changes to cover all possible expenses. Depending on your finances, you might want to consider a Medigap policy that pays for what Medicare doesn’t cover.
5. Make Plans for Living Arrangements
Before considering the future, assess your current living arrangement. Are you happy where you are? Is it suitable? Do you need to make modifications or changes to your current situation? After careful consideration, discuss your thoughts with your trusted family members.
Sometimes you might need to make modifications to your existing home to ensure it’s accessible, safe, and comfortable for you now and in the unknown future. Sometimes it’s as simple as installing grab bars and walk-in bathtubs. You may even choose to move your bedroom to the first floor.
But it’s also important to consider your options for the future when living on your own may not be possible. Create a tentative plan and discuss it with your family.
If you choose to “age in place,” or remain in your home for as long as possible, then also consider if you are financially able to hire part-time in-home care or fulltime live-in assistance.
[link to article “5 Senior Housing Options to Consider” when it’s published]
Choosing a Health Care Proxy
Health care proxy is the term used to describe the person to whom you have given medical power of attorney. That person is your health care proxy. Sometimes it’s tough to decide who that person should be. There are many factors to consider beyond general trust or proximity.
You will need someone who can carry out your wishes even during emotional or stressful times. Ideally, it will be someone who is willing to take on the responsibility and be involved in your medical affairs.
But it also must be someone who shares your values and agrees with your medical decisions. Someone who disagrees with your choices may be tempted to act against them in the heat of the moment, even if their intentions are good.
If you don’t choose a health care proxy and become unable to make medical decisions for yourself, the courts will assign a proxy for you. And it might not be someone you would have chosen. And perhaps more importantly, it also wastes precious time that you might not have.
Taking the time to consider these matters now and put your legal affairs in order can save you, and especially your family, from headaches and heartaches in the future.
