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Special Considerations in Estate Planning for Singles Over 50

 

Maryland estate planning is a necessity for those who are single and over 50. This group includes lifelong singles, divorced persons, and surviving spouses. There will be different considerations depending on one’s situation. Older singles with no estate plan are encouraged to forestall potential problems by preparing one through an experienced estate planning attorney.

Basic math dictates that singles often have a tougher financial path than married couples. Payments, such as mortgages or rent, may be near or equal to that of a couple, but a single person has just one paycheck. This fact applies throughout a range of financial activities. Most singles over 50 must, therefore, be fully informed about their assets and must be able to select financial strategies going forward.

Some Women Over 50 Face Particular Challenges

Getting a handle on one’s financial picture may be challenging for some women over 50. They may face particularly difficult adjustments after the death of a husband or in the aftermath of a divorce. With women outliving men by several years on average, and due to the well-documented increase in “gray” divorces, large numbers of women over 50 find themselves alone and needing estate planning and financial counseling.

The problem is that many women abdicate financial tasks to their husbands during the marriage, studies say. Some women are more inclined to have their husbands handle these tasks. While that may be a useful arrangement while it lasts, it causes some harsh difficulties after the husband dies or a divorce occurs.

Financially unprepared women are left with numerous tasks, possibly including administering retirement plans, maximizing investments, and adopting a plan for financial downsizing. She may also have inherited the family business to run or to liquidate. Also, if there was a second marriage, it is common to see a natural tension between stepchildren and the woman notwithstanding no problems during the marriage. Litigation can sometimes follow, especially where the husband was incompetent prior to death, thereby planting the inevitable suspicion of undue influence.

One common problem involves the marital residence. The children may now be grown and the expenses – home maintenance, property taxes, and insurance — may justify selling and investing in retirement vessels. Because a financially inexperienced woman will be ill-prepared to make such potentially crucial determinations, she may need to first consult with qualified professionals.

Social Security and Medicaid Planning

Planning for future Social Security benefits is also a concern for many. If the marriage lasted at least 10 years, one who is at least 62 can choose to collect benefits calculated on the other spouse’s higher earnings, resulting in a substantial benefit increase. The benefit will revert to the lower amount if the lower-earning spouse remarries.

Singles over 50 are also concerned about an incapacitating disability. Medicare does not cover long-term care costs. One option is to purchase long-term care insurance. The premiums are historically high, but recent hybrid policies offer a greater economic benefit. Where insurance is not desired, there may be a need for Medicaid planning, which intends to qualify the person for Medicaid. This planning can occur after retirement, but younger persons may benefit by starting gradually. The attorney will guide the client through the process of becoming Medicaid-approved.

Get Your Estate Planning Goals Fulfilled

It may be an opportune time to update existing estate plans or to get a new one started. If you do this, a first concern will be who to appoint as representatives for estate, trust, and health proxy purposes. With no spouse or children, these choices are often difficult but easily resolved in confidential discussions with the estate planning attorney. Maryland singles over 50 with no children or immediate family need some basic protections. Without a will, their assets may be forfeited to the state. In the will, one chooses relatives, close friends and/or favored charities as beneficiaries. The best first step is to call an estate planning attorney for an initial comprehensive consultation to review options and strategies for maximum protection.

Information in this article is provided for educational purposes only and not intended to constitute legal advice. Please consult with a licensed attorney in your jurisdiction for help with your specific situation.

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Schedule a consultation with Maryland attorney Elsa W. Smith from the

Law Offices of Elsa W. Smith, LLC in Annapolis at 410-995-7719 or Laurel 301-358-4340.

 

 

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How to Prepare for the Initial Estate Planning Consultation

Maryland estate planning involves setting up a plan that meets the client’s needs, supported by appropriate legal instruments. The plan kicks in during life if a physical or mental  incapacity prevents the client from acting in his or her own behalf. It also provides, through a last will, for the distribution of assets post-death. In some cases, a living trust may be selected as a main tool in the plan. The comprehensive strategy is formulated during an initial consultation with the estate planning attorney. Additional fact-gathering sessions may sometimes follow, and a final meeting is held to review, get instructions, and sign the documents.

What can you do to prepare for that first meeting so that it is an effective and productive interchange?

It is best to come prepared with one’s thoughts and detailed information in hand. The first meeting allows the attorney to learn about the client’s life, family and loved ones, special needs, and aspirations for the future. The attorney can also formulate a thorough picture of the client’s financial situation. In addition, the attorney will set the legal fees and discuss any options in services that may be available. It will ideally begin a convivial and productive relationship, continuing into the future as changing times and circumstances may periodically require modifications and updates.

Preparation begins by your making a folder or container to hold all details regarding your financial life. If there is already a partial or complete estate plan, include also all legal instruments for the attorney’s review. Next, prepare a list of assets, including all real estate, investment and retirement accounts, life insurance policies, cars, boats, trailers, safe deposit boxes, stocks, bonds,  antiques, valuable art and all valuable property. Include proof of income, such as pensions, pay stubs, social security, workers’ compensation and any other benefits.

Copy all accounts, deeds, policies and other indicia of ownership. List all property owned under a right of survivorship with another person, all pay at death accounts, and similar assets. Another important subject these days is to inform the attorney what should be done with one’s digital accounts. Instructions, passwords, and any other details must be provided for each account to avoid controversy and even post-death litigation over these matters.

Prepare a list of debts, including mortgages, loans, credit cards, medical bills and other debts. Include also co-signed loans and copies of any divorce agreements, contracts, business agreements, and legal documents that may elucidate relevant financial matters. List also each person to be appointed, including the executor, the agent for the power of attorney, trustees, and a health care proxy designee. The same person can serve more than one task, and the client must decide the best choice for each, along with an alternate just in case. Be prepared to say whether the doctors are authorized to use artificial means to prolong life during a final illness.

 

It is important to come with a list of each person who will inherit under the will, with current address, phone number, and the percentage given to each or that they shall share equally.  Create also a list of all relatives, including decedents and even those who are not beneficiaries. The executor may be mandated by law to send them notice when opening the estate.

The client may designate a financial planner or CPA to attend the first meeting, with advance notice given to the estate planning attorney. The attorney will work cooperatively with other experts to achieve the best outcome for the client, while applying both federal and Maryland law in the calculations where applicable. It all sounds like a lot of work, but it is easy once you get started! It is well worth the effort and will save you money by not having to invest time later on searching for missing estate planning information.

Information in this article is provided for educational purposes only and not intended to constitute legal advice. Please consult with a licensed attorney in your jurisdiction for help with your specific situation.