Bottom line up front. You have a 100 percent chance of dying. It is the third leg of the only constants in life, which is death, taxes, and change.
The baby boom generation is dying off. One report says 20 million baby boomers are already pushing up daisies. Based on a life expectancy of mid 70s, a large number of deaths are happening 2034-2044
Do you need a will and estate plan? Yes. No matter how old you are.
Will your will be needed at your death? Maybe, maybe not. It depends on when and how you die and how much stuff you have when you die.
Do you need powers of attorney for health care decisions and general powers of attorney for when you are disabled or not able to make decision but are not dead? Yes. No matter how old you are.
Will your power of attorney holders ever act on your behalf? Maybe but it is more likely than not.
Can a power of attorney act after your death. No.
Can I just give it all away now without consequences. Maybe, maybe not. You need to consider gift tax and eligibility for state aid for nursing home care assistance before you do a large gift.
Can’t I just put my kids on my deed with me? Sure, see above and all to consider the kids now own part of the property and the people they owe money to will be glad to see the asset in the kids name.
If both spouses are listed on the deed, I don’t have to do anything when the firsts one dies. Wrong. You may have to open an estate; you may have to file an affidavit. Generally, the longer you have had the property and not reviewed title, the higher the chance that you may be holding the property in a manner that requires a probate estate when either spouse dies.
Nursing home care in Iowa is reported to average $89,000 a year. Average stay for a female is 3 years and males is 18 months. 20% of the population will need I think in actual costs, $100,000 per year is a better planning number. That is $1,000,000 for five years of care for a married couple. If you have that much saved or have that much equity, you can make some smart plans now to preserve assets for the next generation. Likewise, if you have cashflow that allows you to pay as you go. That cash flow cold be nursing home insurance, social security, and retirement payments. It could be cash rent from real estate.
If you don’t have that much in asset or cash flow but have some assets that you want to see, get to the next generation, some more intensive planning is required.
If you find yourself with not much in cash reserves, equity or cash flow, it may be a good course of action to enjoy your accumulated wealth while you can and not spend a lot of effort on trying to create a pile of cash to pay for care that is vital but not probably how most folks want to spend their earnings in their last years.
What’s right for you is not right for your bridge partner, your sister in-law, or the neighbor. What is a good call is to review your plan and consult the professionals you trust.
If you have an ag operation and you want to see it from the pearly gates as more than a name on a yield monitor, you would do well to establish a business succession plan as part of your larger estate plan. That will require hard decisions and it may not result in a perfectly divided wealth transfer the next generation. Setting aside a desire to demonstrate love and affection equally from the desire to transfer a business asset to the next generation who has likely helped you maintain or grow that asset is crucial to making any meaningful plan.
