Deep inside the recesses of our minds, we know that we are not going to live forever, and that there’s a chance as we get older that our minds and body will no longer be sound. We’ve lived enough life for us to experience and observe loss firsthand. Yet, as dads, we rarely think about what our aging means practically to those around us.
For instance, we often don’t think about how our finances will be dealt with after passing or when we cannot manage our affairs. In addition, we don’t spend the time to think about the people, such as our children or our spouse, who will be left to deal with our assets, debts, and personal affairs. It’s not fair to leave them with this burden.
We know that as dads, it’s in our DNA to be like flamingoes when it comes to our mortality. We’ll be the first ones to run into a fire without blinking an eye if our kids or family dog are in the house. We’ll do anything to protect our family. But when it comes to getting our affairs in order, if one day we no longer have a sound mind and body or are no longer around, forget about it. As dads, we naturally don’t think that will happen anytime soon.
Hopefully, God blesses you with a long and healthy life. That said, don’t confuse faith with negligence. It’s critical to plan for your future because otherwise, you will be saddling your immediate and extended family with making the decisions you could have dealt with yourself if you just spent a little time today.
If you are in your 40s or 50s especially, please read on for three things you can quickly take care of now with your estate planning that will make a huge difference in securing your future for yourself and your family.
Number 1: Get Permanent Life Insurance
Term life insurance will give you coverage for a fixed period, such as 15, 20, or 30 years. Term life insurance works fine when you are in your 20’s and 30’s. But if your net worth is high (approximately a million in assets), you should be considering a permanent life insurance policy.
Many permanent life insurance policies will help pay future estate taxes and increase the amount you can give to your children and loved ones. When you get a permanent life insurance policy early on, your premiums are often a third or even a half of what those premiums would be if you purchased the policy in your 60s. The premiums are astronomical if you try to buy one of these policies in your 60s.
Get in early.
Number 2: Designate Powers of Attorney
The hard truth is this: the older you get (and we all are getting older due to better nutrition and advances in science), the greater the likelihood that you will need another person to make financial and/or health care decisions for you.
Here’s the other hard truth: as a general matter, you often won’t know you no longer have an unsound mind or body. So, for instance, if you are in an accident, you might not be able to make certain decisions.
That’s why you have to designate someone before those potential scenarios. That person could be your spouse, brother, sister, or partner. But that isn’t always automatic, depending on where you live. Concrete steps have to be taken by way of powers of attorney.
To be safe, the Review Dads recommend you maintain a durable power of attorney. A durable power of attorney takes effect once the document is signed and remains in effect until your death or until it’s revoked.
The other type of power of attorney is a springing power of attorney. We don’t recommend this because it only takes effect if you become incapacitated. The issue with the springing power of attorney is that your designated individual must show or establish that you are incapacitated. Therefore, in certain types of emergencies (for instance, if you are in another country), your agent may not be able to quickly make certain decisions on your behalf.
Number 3: If You Want To Preserve and Protect Your Estate, Then Invest In Long-Term Care Insurance
The hard truth is this: even if you’ve built a hefty estate, a serious debilitative illness such as ALS or Parkinson’s which requires dedicated care, will drain your liquid assets (or the liquid assets of your family) very, very quickly. The average cost for a home health aide is in the ballpark of $70,000 and for a nursing home over $100,000 — yearly. That could be more depending on where you live. The longer you live, the greater the chance you’ll need long-term care especially as you surpass 65 years old.
Let’s be clear: Your standard health insurance will not cover these expenses over the long term. Long-term care insurance is something you get in addition to your regular health insurance.
If you’re a dad in your 40s or 50s, you might be wondering why you would need to purchase long-term care insurance now. Here are two compelling reasons:
- If you are diagnosed with a severe illness, a long-term care insurance company will likely deny you coverage if you try to purchase the coverage once you are diagnosed. Remember, insurance companies aren’t charities. They are trying to make money.
- The premiums are much lower if you purchase long-term care insurance in your 40s and 50s. If you try to buy your premiums in your 60s, the prices will be astronomical. Again, insurance companies are running a business, not a charity.
You must conceptualize Long-Term Care Insurance as an investment in protecting your estate rather than merely an expense on your balance sheet. Sure, maybe you’ll never need long-term care insurance. But the fact is you won’t know whether you’ll need that insurance 10 or 15 years from now. You know how much it costs if you do end up needing long-term care. It’s more than just a pretty penny.
There Is No Better Time Than Now
Planning for the future is generally a task that dads don’t think too much about. We are often occupied with the here and now. But if you’ve ever witnessed a friend grapple with losing a loved one, you know the toll that can take. We’ve provided you with three quick things you can do today — get permanent life insurance, obtain a durable power of attorney, and purchase long-term care insurance — to protect your estate and ensure that your children, spouse, and family aren’t saddled emotionally and financially.