Three Most Important Family Preparedness Steps

When I think about what frightens parents, seeing their children in a vulnerable position pretty much tops the list–whether it’s at home, at the pool, or any other place in public.

What exacerbates this is knowing the fear which children themselves feel when they are surrounded by people they don’t know, and when they can’t fully understand just how much love their parents have for them.

Put these steps into place…and you’ll eliminate at least some of these dangers…

#1: Identify a Clear Plan for the Care of your Children.
Did you know that 74% of parents have not named guardians? Worse, of the 26% who have, most have made 1 of 6 common mistakes that leave their kids at risk.

When you name short AND long-term guardians for the care of your children, you must give clear guidance to your caregiver and everyone you’ve named to care for your children, in written form. Just by naming these guardians (both short and long-term), your children never have to be put in a situation in which they would be taken out of your home and into the hands of strangers if something happens to you.

An even better step, if your children are old enough for this discussion, is to tell them this plan. Don’t make a big deal of it…you don’t want to frighten your kids at the prospect of your loss. But they’ll feel better knowing that you’ve selected people they can trust and love to care for them well.

#2: Properly Document Your Decisions
Parents often have discussed and agreed upon a guardian for their children and have even made their wishes known to their families; however, not documenting these decisions can result in your wishes not being followed when it really is too late.

You see, if you don’t communicate your wishes in a legally-binding document, you are placing your children in a “free for all”. Without clear, legal guidance, every family member has equal priority of guardianship and the decision about the care of your children will be left in the hands of a broken-down court system and some judge who doesn’t know you or your kids.

This legal documentation is particularly important if you intend for a friend to care for your children as courts will almost always choose a family member over a friend.

Also, don’t forget to be sure to leave behind specific guidance about how you want your children raised.  Education decisions, healthcare decisions, discipline decisions … these are all things you care a lot about and would want made consistent with your opinions for how your kids are raised.

#3: Don’t Neglect Their Financial Future
Sure; there are different schools of thought on this issue. Some parents don’t want to overwhelm their children with too much in their bank accounts at once, which is understandable.

But, regardless of how you structure this provision, providing sufficient financial resources for your children’s care is your responsibility. And, as a responsible parent, you must take steps to protect what your children will receive … whether it’s through life insurance, savings or some other means.

To do so, establish a living trust to receive any life insurance benefits your children would receive so that they don’t get access to your assets at the age of 18, and make sure your living trust holds on to the title to any assets that would go through probate in the event of your death. And, if your estate is large enough, you will want to plan to avoid estate taxes as well.

Many of these issues can be handled by an estate-planning attorney, and we’d be happy to put you in touch with somebody good. Or, there are online options as well. Either way…let us know how we can help! Visit our site www.savemoretaxes.com to obtain your free report on saving more taxes.

Who Needs Long-Term Care?

Who Needs Long-Term Care?

Here are some interesting statistics. Baby boomers  start turning 65 in 2011 and the number of older people will increase dramatically during the 2010 to 2030 period. The older population in 2030 is projected to be twice as large as in 2000, growing from 35 million to 71.5 million. [Source: 2009 Long Term Care Insurance Sourcebook, American Association for Long-Term Care Insurance]

Between 2000 and 2040 the number of older adults with disabilities will more than double, increasing from about 10 million to 21 million. [Source: 2009 Long Term Care Insurance Sourcebook, American Association for Long-Term Care Insurance]

More that two-fifths (42%) of people age 65 and over reported a functional limitation. Eighteen percent had difficulty with 1-2 Activities of Daily Living. Five percent had difficulty with 304 ADLs. And three percent had difficulty with five to six ADLs. [Source: 2009 Long Term Care Insurance Sourcebook, American Association for Long-Term Care Insurance]

An estimated 10 million Americans needed long-term care in 2000. [ Rogers, S., & H. Komisar. Who needs long-term care? Fact Sheet, Long-Term Care Financing Project. Washington, DC: Georgetown University Press, 2003. ]

Most but not all persons in need of long-term care are elderly. Approximately 63% are persons aged 65 and older (6.3 million); the remaining 37% are 64 years of age and younger (3.7 million). [ Rogers, S., & H. Komisar. Who needs long-term care? Fact Sheet, Long-Term Care Financing Project. Washington, DC: Georgetown University Press, 2003. ]

The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older. [ AARP. Beyond 50.2003: A Report to the Nation on Independent Living and Disability, 2003, (11 Jan 2005). ]

By 2050, the number of individuals using paid long-term care services in any setting (e.g., at home, residential care such as assisted living, or skilled nursing facilities) will likely double from the 13 million using services in 2000, to 27 million people. This estimate is influenced by growth in the population of older people in need of care. [U.S. Department of Health and Human Services, and U.S. Department of Labor. The future supply of long-term care workers in relation to the aging baby boom generation: Report to Congress. Washington, DC: ]

Of the older population with long-term care needs in the community, about 30% (1.5 million persons) have substantial long-term care needs (three or more ADL limitations). Of these, about 25% are 85 and older and 70% report they are in fair to poor health. [The Henry J. Kaiser Foundation. Long-term Care: Medicaid’s role and challenges [Publication #2172]. Washington, DC: Author, 1999 ]

40% of the older population with long-term care needs are poor or near poor (with incomes below 150% of the federal poverty level). [The Henry J. Kaiser Foundation. Long-term Care: Medicaid’s role and challenges [Publication #2172]. Washington, DC: Author, 1999 ]

I consider having Long Term Insurance as being critical for  your financial protection.  Do you know anyone who had to go to a nursing home? Both my parents required assistance and it was not pretty.  Don’t become a burden to your family. If you want to discuss this, let me know.