As you plan for and then enter retirement, getting your financial affairs in order is crucial.

However, many couples put off essential estate planning conversations (about wills, living wills, powers of attorney, and trusts) until it's too late.

Don't make that mistake - addressing these four essential questions with your spouse today can provide invaluable peace of mind, prevent both economic and family issue, and help to secure your legacy.

couple at home reviewing paperworkQuestion 1: Do We Have An Estate Plan With Up-to-Date Wills/Trusts and Powers of Attorney in Place?

One of the most important first steps in estate planning is ensuring you have a comprehensive, and well thought out plan and the documents to carry out those estate planning strategies.  That foundational set of documents, typically starts with an up to date and legally-binding will.

Your will outlines how you want your assets and property distributed after you pass away. It also allows you to name an executor who will be responsible for carrying out your wishes.

Unfortunately, research shows that over 60% of Americans do not have a will in place. Many assume their assets will automatically go to their spouse or children, but without a will, the state's intestacy laws will determine the distribution - which may not at all align with your preferences and desires.

Furthermore, administering an estate without a will means that state law determines not only who gets what, but who is in charge of the estate and distributions.  You should be the one to make such determinations, and a will (or in some cases a will and a revocable trust) is the way to make such decisions and elections.

Beyond a will, it's also critical to have durable powers of attorney for both healthcare and finances. These legal documents empower someone you trust (your "agent") to make important decisions on your behalf if you, or you and your spouse become incapacitated and unable to do so yourself.

A healthcare power of attorney gives your agent the authority to make medical decisions, while a financial power of attorney allows them to manage your finances and assets. Failing to have these documents in place can lead to costly and heartbreaking legal battles for your loved ones down the line.

"So many families get blindsided when a parent or spouse becomes incapacitated and they don't have the proper legal documents in place," says estate planning attorney David Frees with Unruh, Turner, Burk and Frees. "It can create enormous stress and conflict as family members struggle to make decisions and take care of their loved one's affairs. That's why getting your will and powers of attorney squared away is the first essential step."

Question 2: Have We Carefully Considered All Our Asset Titling and Beneficiary Designations?

Beyond having a comprehensive will (and or trust), you also need to carefully review how your assets are titled and who you have designated as both primary AND contingent beneficiaries. This is crucial for ensuring your wishes are carried out and your loved ones are provided for. Failing to do this step right can also have very negative income tax, inheritance tax, and even estate tax consequences. 

There’s no one right approach to these issues, so make sure to consult your estate planning attorneys and your accountant as the title and beneficiary designations control rather than the will.

Many common assets, like bank accounts, retirement accounts, and life insurance policies, allow you to name specific beneficiaries. And again, these beneficiary designations supersede what's outlined in your will. So if you have an ex-spouse named as the beneficiary on a life insurance policy, that money will go to them regardless of what your will states.

It's important to review all your assets and make sure your beneficiary designations are up-to-date and align with your current wishes. This is especially important after major life events like marriage, divorce, or the birth of children or grandchildren.

According to Douglas Kaune of Unruh, Turner, Burke and Frees, "I've seen too many cases where people forget to update their beneficiaries to match their estate planning and it leads to really messy and heart-wrenching situations for the family and it’s easy to understand why.  It takes time and often seems complicated. But, taking the time to review and update those designations can save your loved ones a lot of stress and conflict down the road."

In addition to beneficiary designations, you'll also want to review how your assets are titled. Jointly-owned property, for example, will automatically pass to the surviving owner upon your death, regardless of what your will states. Understanding the nuances of asset titling is crucial for effective estate planning.

Question 3: Have We Considered the Role of Various Types of Trusts in Our Estate Plan?

While wills are a critical foundation, many retirees can benefit from incorporating trusts into their estate plan as well.

Trusts are legal arrangements that allow you to place assets under the management of one or more trustees, who are then responsible for administering those assets according to your specified terms and conditions.

Trusts can offer several key advantages over a traditional will-based plan:

- Avoiding Probate: Assets held in a trust don't have to go through the often lengthy and expensive probate process. This allows your loved ones to access those assets more quickly and privately.

- Protecting Assets: Certain types of trusts, like irrevocable trusts, can protect your assets from creditors, lawsuits, or even Medicaid spend-down requirements. And trusts drafted during your lifetime, or under your will, can be created in a way to give your heirs divorce and creditor protection during their lifetime.

- Controlling Asset Distribution: Trusts give you more control over how and when your assets are distributed to your beneficiaries, which can be especially useful if you have concerns about their financial responsibility or ability to manage an inheritance.

- Tax Planning: Some trust structures, like charitable trusts or qualified domestic trusts, can provide tax benefits and help minimize the impact of estate taxes.

According to attorney David Frees, "Trusts are incredibly powerful estate planning tools, but they require careful consideration and set-up”, and "It's essential to work with an experienced professional to ensure your trust is structured properly, that taxes are filed properly, and that the trust or trusts are aligned with your specific goals and circumstances."

Question 4: Have We Sufficiently Planned for the Potential Need for Long-Term Care?

As you enter retirement, the possibility of requiring long-term care at some point becomes increasingly likely.

In fact, about 70% of individuals aged 65 and older will need some form of long-term care during their lifetime.

The costs associated with long-term care can be staggering, with the average annual cost of a private room in a nursing home exceeding $125,000.00 dollars. This can quickly deplete your retirement savings and assets if you don't have a plan in place. And that asset depletion can be extremely difficult when one spouse remains at home while the other spouse needs long term care.

That's why it's crucial to have open discussions with your spouse, your children, and your advisers about your long-term care preferences and how you plan to cover those costs.

Key considerations include:

- Long-Term Care Insurance: Purchasing a long-term care insurance policy can help offset the costs of in-home care, assisted living, or nursing home stays. However, these policies can be costly, so it's important to evaluate your needs and budget carefully.

- Medicaid Planning: For those with limited assets, Medicaid may be an option to cover long-term care expenses. But navigating Medicaid eligibility rules requires strategic planning, often years in advance. And generally, elder law attorneys with experience will be needed to help you to establish the right kinds of trusts to protect assets while you remain eligible to receive care.

- Home Modifications: Investing in home modifications like grab bars, ramps, or stair lifts can help you age in place for as long as possible and delay the need for more intensive (and expensive) care.

- Family Caregiving: Relying on family members to provide in-home care can be a cost-effective solution, but it's important to have honest conversations about the emotional and physical toll this can take.

Doug Kaune, who chairs the elder law section of Unruh, Turner, Burke and Frees reminds us "Long-term care planning is absolutely critical, yet it's an area that many retirees neglect. Taking the time to thoughtfully consider your options and put a plan in place can make an enormous difference in your later years and protect your hard-earned savings for a spouse and for your children and heirs."


Obviously, protecting your ability to live life in retirement on your own terms requires thought and financial planning.

But, securing your legacy and ensuring your loved ones are cared for is also one of the most important responsibilities of retirement.

By addressing these four essential estate planning questions with your spouse today, you can provide invaluable peace of mind and take a crucial step towards a lasting, prosperous legacy.

Don't wait until it's too late - have these crucial conversations now, and work with experienced legal and financial professionals to get your affairs in order. Your future self and loved ones will thank you.

What’s next?

Need more information on estate planning?  Download our reports here.

Ready to get started on your plan or to update an older estate plan now that you’re nearing or in retirement?  Call 610-933-8069 for information on the cost and the process.

David M. Frees, III
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Attorney, Speaker and Author
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