Hate to think about it, but we (the Baby Boom generation) are getting older. Financial firms advertise that the Boomers should be “planning for retirement”, but that usually focuses on retirement savings. Not many marketers are discussing “wealth preservation” issues. What are those?
Starters: everyone – whether you are just 18 or 102 – should have a durable power of attorney and a health care proxy.
- Durable power of attorney appoints a designee to act on your behalf if you are unable to handle your financial affairs (either permanently or temporarily)
- Health care proxy appoints a designee to make your medical decisions for you if you are unable (as determined by your physician)
How does this preserve your wealth? Having both documents avoids massive legal fees (remember courts and lawyers are expensive) if you ever become incompetent.
Estate taxes: Don’t be lulled into the belief that such taxes are only for the super-wealthy. Yes, the federal exemption is $11,200,000 and increasing, but don’t forget the Massachusetts estate tax. A person with a $2 million estate (house, retirement accounts, life insurance etc.) would pay over $100,000 in MA estate tax at death. Talk with Wealthplc to minimize or avoid such estate tax for your family members.