Why is Estate Planning Like a Financial Time Bomb?

“Live long and prosper.” – Mr. Spock, Star Trek

Get ready. It’s coming, and one writer calls it “a looming elderquake”.

It is the financial time bomb of longer lives. This is what I read in a New York Times column by Natasha Singer [Sunday October 17, 2010, Bright Ideas]. Her article was entitled the “Financial Time Bomb of Longer Lives”.

Singer starts with this good news; we are living longer, healthier lives than ever before. She quotes statistics from the Census Bureau for life expectancies. These are figures for boys and girls born in 2008 in the United States. They can expect to live to 75 and 81 years of age, respectively.

For the first time in history, people aged 65 and older are about to outnumber children under 5.

What does that mean for people looking after this demographic shift?

As an estate expert, this is part of the bad news.

Estate planning for people who live longer becomes more relevant. Families must learn about their options sooner than later.

You do not want to take Granny to a lawyer to make her will when she is 89. This only makes it difficult for everyone involved. You cannot wait until a crisis to help your parents. You also do not want to create nightmares for your children.

If you are providing care for relatives, you must be prepared to deal with their needs. This means ensuring that there are proper legal documents in place.

Up-to-date powers of attorney and wills will be crucial to authorize you. How else do you protect the financial assets of those who may become incapacitated by dementia, or be subject to elder abuse.

These are some of the things I discuss in Executor’s Disease – the next epidemic that will affect your family and your money. You can get my free eBook that describes it here.