As part of your financial and estate planning, you should make arrangements for your care in case you become incapacitated. Such advance planning will help preserve family assets, provide for your own well-being, and can help avoid the turmoil and publicity of a guardianship hearing which might be required if nothing has been done.
Possible strategies include:
* Create a revocable (“living”) trust to hold assets. Even after you transfer assets into the trust, you can still control those assets and collect any income they provide. If you lose the ability to manage your own affairs, a co-trustee or successor trustee can take over the management of trust assets for you.
* Create a durable power of attorney. This document names someone else to manage assets that are not held in trust. You might get powers of attorney from the financial institutions that hold such assets, such as your IRA. Many financial firms are reluctant to recognize powers of attorney that are not on their own forms.
* Joint accounts. You might set up a joint checking account with, say, a trusted child or other relative. Then that person can pay your bills, if necessary. Be aware, though, that assets held in joint name will go to the co-owner at your death, even if you name other heirs in your will.
Also bear in mind the possible costs of ill health accompanying incompetency. This would include not only health insurance but also potentially disability insurance (if incapacity should occur when you otherwise would still be working) and long-term care insurance, to pay providers of custodial care, at home or in a specialized facility such as a nursing home.
ask.FEDweek.com: FEGLI – Federal Employees’ Group Life Insurance