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Durable financial power of attorney: What can your agent do?

When creating an estate plan, it's important to think about what would happen to your finances if you were to become incapacitated. If you're unable to make your own decisions, you want to know that someone responsible can step in and do so on your behalf.

A durable financial power of attorney gives another person, known as an agent, the ability to perform a variety of tasks. These include, but are not necessarily limited to, the following:

  • Paying your bills and taxes
  • Paying medical expenses as they arise
  • Managing real estate, such as making mortgage payments and collecting rent payments
  • Investing
  • Collecting retirement and Social Security benefits
  • Operating your business
  • Hiring professionals to assist with specific tasks

Ask and answer these questions when touring a nursing home

There is more to touring a nursing home than checking out the surroundings, chatting with staff and hoping to get a better feel for what it has to offer. If you really want to make the right decision, you need to focus on the many details that give you a clear understanding of what's offered.

This will lead you to ask and answer a variety of questions, including but not limited to the following:

  • Are there any bad smells associated with the facility?
  • What do you see when you look at the residents who are already living there?
  • Is the staff attentive to the needs of residents, or are they off doing something else?
  • What type of care does the nursing home offer?
  • Is the nursing care facility certified by Medicare and Medicaid?
  • How long does the average resident live in the facility?
  • What are the qualifications and experience of the staff?
  • What makes the facility different from the others that you have toured?

Planning for long-term care needs and Medicaid as you age

People don't like to think about growing old or dying. That's why so many adults put off estate planning and end-of-life care preparations. Some individuals who live well into their golden years never require long-term care. Many others are not as lucky. They may require in-house nursing or may need to go live in an assisted living facility, such as a nursing home.

Individuals faced with these care needs are often shocked to learn that Medicare does not cover those expenses. In fact, the cost of in-home nursing or living in a nursing home is incredibly high. It can be thousands of dollars a month, which is difficult to pay when you are on a fixed income after retirement.

Do you know how to reduce your credit card debt?

There may come a point when you realize that you have entirely too much credit card debt. If this happens, it's critical to take immediate action to ensure a better financial future.

There's nothing simple about paying down credit card debt, but there are steps you can take to help your cause. Here are five to consider:

  • Know what you're up against: It's one thing to know you're facing credit card debt, but another thing entirely to understand the exact amount.
  • Search for a better rate: A lower interest rate can save you money as you carry a balance from month to month. You can negotiate this with your lender or opt for a balance transfer credit card.
  • Put your credit cards away: It's difficult enough to pay down the credit card debt you already have. You don't want to add more to this every month.
  • Pay more than the minimum: You can pay off your credit card debt by paying the minimum every month, but it's going to take much longer. If you can afford to pay more than the minimum, do it.
  • Track your progress: When you see yourself making progress, you're more likely to stick with your strategy over the long run.

Clear up these bankruptcy myths before filing

Filing for bankruptcy is a serious decision that will impact your personal and financial life in many ways. Not only does this hold true now, but in the future as well.

If you believe any bankruptcy myths to be true, there's a very good chance you could make a poor decision. Here are a handful of myths to clear up before filing:

  • You'll lose everything in bankruptcy. It's true that you may lose some of your assets, but it's not likely that you'll lose everything. With legal exemptions, you may be able to keep most or all of the assets you value.
  • A bankruptcy wipes clean all your debt. This would be nice, but it's not the way the process works. Some types of debts and obligations, such as student loans and child support, are not impacted by bankruptcy.
  • Bankruptcy will stop you from making future purchases. It's true that a bankruptcy filing will remain on your credit report for 7 to 10 years. For this reason, securing a loan is much more difficult. However, if you devote yourself to rebuilding your credit after bankruptcy, you can once again secure a loan at some point in the future.

Can childhood conflicts create drama when planning for parents?

It's a sad reality that many families disagree about the manner in which elderly parents' affairs are decided once the parents are no longer able to make decisions for themselves. What frequently is occurs is that childhood dramas and sibling rivalries affect the decision-making process — often to the detriment of the parents.

Ideally, all parents would draw up their own estate plans that address the care they plan to seek once physical or mental disabilities render them in need of hands-on assistance. This is not the case in many families, however.

Steps to creating your first estate plan

There will come a time when you decide to dive in and create your first estate plan. Even if you waited longer than you should have to do this, you're now faced with the process.

There are many steps that will put you on the right track to creating your first estate plan, including:

  • Deciding between a will and trust. There are pros and cons of both, so compare the finer details before making a decision. A will is typically easier to create, but a trust offers benefits like avoiding probate for your beneficiaries.
  • Choosing the right beneficiaries.: This is easy for some people, as they name a spouse and/or adult children. Others, however, need to think outside the box, especially those without any immediate family members or heirs.
  • Creating a durable power of attorney. If you're incapacitated and unable to make your own decisions, a durable power of attorney gives your agent the power to takeover management of your money and make health care decisions for you that are in your best interest.
  • Making a list of assets and debts. Without this, you could neglect to leave a particular asset to the specific person you intend. With a checklist in hand, this shouldn't be a concern.
  • Naming a guardian for your minor children. If you have children under the age of 18, you will need to name a guardian who will take over your parenting duties should you pass away.

Tips for helping a parent find a nursing home

When helping a parent find a nursing home, you're sure to face a variety of emotions. On one side, you know it's the right thing to do, so you're happy to help. Conversely, you may be upset that your parent is no longer able to care for him or herself.

There are many steps you can take to help your parent find the perfect nursing home or extended living center. Here are five things to consider:

  • Visit several facilities. The last thing you want to do is make a rash decision just because the first facility you visit appears to have everything your parent will need. Compare at least three nursing homes before making a final choice.
  • Talk with your parent about the move. They're likely to have some anxiety about moving to a nursing home, so you need to keep an open line of communication.
  • Talk to the staff. You don't want to focus solely on what you see on the surface. You need to talk to the staff to get a better idea of how they act, what they offer and what your parent can expect. Watch for red flags during these conversations.
  • Ask questions. This goes along with talking to the staff, but takes things a step further. The more questions you ask, the more you'll learn. Learning more about the options your parent has can make it easier to choose the right facility.
  • Learn more about the food and floor plan options. Every nursing home is slightly different in these areas, so you should dig into the finer details to learn more. Is the food high quality? Are there many options? Is there more than one room layout to choose from?

Do you know why you’re always overspending?

No matter how hard you try, there will be months when you overspend. You look at your budget and realize that you didn't do a good job staying on track.

While it's okay to make mistakes every now and again, it should be your goal to stay within your budget at all times. Doing so goes a long way in helping you avoid long-term financial trouble.

Situations that may point you toward bankruptcy

Most people understand the seriousness of filing for bankruptcy, which is why they take their time when making a final decision. While it's okay to consider all your options, you don't want to delay too long.

Here are a few situations that often lead to a bankruptcy filing:

  • Your debt continues to grow: No matter how hard you try, you keep digging yourself a deeper hole. If your debt continues to grow no matter what you do, it's time to consider the impact bankruptcy can have on your life.
  • You're using your retirement funds to get by: If you're desperate enough, there may come a point when you turn to your retirement accounts for money. It's your right to do so, but it will definitely impact your ability to retire in the future.
  • You're in jeopardy of losing your home: No one wants to lose their home to repossession but if you're not current on your mortgage, this could happen sooner than you think. Through a bankruptcy filing, you can stop your lender from proceeding with foreclosure, thus allowing you to save your home.
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