Issues to Consider When Buying A Home
There are issues to consider when buying a home, including how the costs of purchasing and owning a home will impact your financial goals.
No one likes to imagine a time when they might be sick or unable to make decisions for themselves. It ranks alongside cleaning out the garage or scheduling a long-overdue physical. Important, but all too easy to postpone. Yet planning for these possibilities can make all the difference.
Without a clear plan in place, the state might step in and appoint a guardian to make financial and medical decisions on your behalf. Someone you did not choose could end up deciding where you live, how your money is managed or what medical treatments you receive. That is not a situation any of us wants to be in.
Incapacity exists on a spectrum. It could look like cognitive decline from Alzheimer’s or dementia, physical incapacity after an injury or illness, a sudden event such as a stroke or a gradual decline over time.
Because these scenarios unfold differently, and at different life stages, you will need four key documents to address them: a durable power of attorney, health care proxy, living will, and a will or trust.
You may have one or two of these documents already, but comprehensive planning requires all four. Together, these documents create a coordinated safety net. Without one, gaps can appear. It is a bit like living near a river and buying homeowner’s insurance but skipping flood coverage. You are mostly protected, until you are not.
A durable power of attorney (DPOA) is a legal document that authorizes someone (known as your agent or attorney-in-fact) to manage your financial affairs on your behalf. The word “durable” here is key. It means that the document is valid even if you become mentally incapacitated.
Your agent can be authorized to manage bills, banking, investments, and business interests.
Choosing the right person to fill this role matters. Consider someone who is financially responsible, trustworthy, and capable of handling potential conflict if family members disagree. Many people select a spouse or adult children. If these options do not feel appropriate, we can help you identify another trusted individual or a professional fiduciary.
It is also wise to appoint a back-up agent in case your first choice is unavailable when needed.
Your health care proxy is a document that designates an agent to make medical decisions if you are unable to make them yourself. This covers situations where you are unconscious, severely ill, undergoing surgery, or have lost cognitive capacity.
The health care proxy is typically activated when a physician determines that you lack decision-making capacity. At that point, your agent can step in and make decisions about treatments, surgeries, medications, care facilities, and in some states, end-of-life decisions. Ideally, these decisions are guided by your known wishes or their best judgment of what you would want.
Again, a spouse or adult children are common choices. Whoever you name should be someone who understands your preferences about medical care, is comfortable making decisions under pressure, and can advocate for you with medical professionals.
It is also common to name different individuals for medical and financial decisions. It creates natural checks and balances and helps prevent one person from carrying the entire weight.
A living will complements your health care proxy. This document spells out (in your own words) the medical treatments you do and do not want in specific circumstances, such as a terminal condition, a persistent vegetative state, or at the end-stage of an illness with little hope for recovery.
You do not need to name an agent for a living will. However, it may be helpful to come up with this document in conversation with your physician and estate attorney. Tools like the “Five Wishes” framework can serve as a jumping-off point for clarifying your preferences.
Your estate plan should also include a will or a trust that addresses what happens to your assets when you die or are incapacitated.
A will outlines where property should be distributed when you die. You will need to name an executor of the will who oversees executing your wishes when you die. You will also need to name a guardian for minor children.
A revocable living trust goes a step further. It allows you to transfer assets into a trust during your lifetime, typically naming yourself as the initial trustee so you retain full control. A successor trustee can step in if you become incapacitated or die. There are several types of revocable trusts. We can work with you and your estate attorney to help determine which one is right for you.
Because assets in a trust can be managed without court involvement, a trust often allows for a smoother transfer of property. Transfers from a trust are private, generally faster and often less expensive than if your estate is forced to go through the probate process.
No single document covers every phase of incapacity or death. The goal is to have all four in place, kept current and accessible to the people who may need them.
One important area these documents do not cover is beneficiary designations on retirement accounts and life insurance policies. These designations override instructions in your will, so make sure they are up to date and aligned with your wishes.
Finally, remember that life is dynamic. Laws evolve, financial situations shift, and relationships change. We will plan to review each of these documents regularly (especially after major life events such as marriage, divorce, the birth of a child, relocation, or significant changes in wealth) and update them when needed.
This checklist was prepared and first distributed by The Writing Company.
DISCLAIMERS
This material is intended for general public use. By providing this material, we are not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. This is not an offer to buy or sell a security.
Shore Point Advisors is an investment adviser located in Brielle, New Jersey. Shore Point Advisors is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Shore Point Advisors only transacts business in states in which it is properly registered or is excluded or exempted from registration. Insurance products and services are offered through JCL Financial, LLC (“JCL”). Shore Point Advisors and JCL are affiliated entities.
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