It’s always necessary to have important documents organized but it becomes even more important as you age. You must have the necessary documents, update them regularly, and have them located somewhere where you or designated family members will be able to access them on short notice.
Contrary to popular belief, important documents should not be stored in a safe deposit box due to many banks’ restrictive access policies (a family member or friend may not be able to access it in the event you are not present). A better idea is to keep one copy with an attorney, and another copy in a secure, yet accessible place in your home or with a trusted friend or family member.
Here is a list of important documents as you age, and when to update them.
A will is the basic document that will express your final wishes. Though it’s important to have one prepared throughout your life – especially when you have dependents – it becomes more important as you age.
When to update: It may not be necessary to update a will on a regular basis, but it should still be reviewed annually. Updating will be necessary in the event that there is a change in family structure (birth, death, or divorce of beneficiaries), or a significant change in your financial/asset situation.
A Living Will
A living will expresses your wishes in regard to your care in the event that you become incapable of making certain decisions. It can cover a variety of medical treatment, but most commonly describes circumstances under which you might want care to continue, or to have it terminated.
When to update: It should be reviewed annually, and updated only as your wishes in this area change.
It’s often assumed that all is well as long as insurance premiums are being made on a regular basis. But anytime it’s necessary to file a claim, a copy of the latest policy is a must-have document. It will provide you with guidance in case there’s a dispute over payment of claims. It also includes the policy number, as well as the agent’s name and contact information.
When to update: Insurance policies should be reviewed annually. In the case of life insurance, it may be necessary to update the policy when there is a change in beneficiaries. Policies should also be reviewed to determine that the amount of coverage is sufficient for your current circumstances.
Durable Power-of-Attorney Documents
There are two basic types of power of attorney documents, one for finances and one for healthcare decisions.
A durable power of attorney for finances appoints a third-party to legally act on your behalf if you are no longer capable of handling your financial situation. Having one in place can enable you to appoint the specific person or persons of your choosing to handle the job. It will also permit a court from making a decision to appoint an unrelated third-party in the absence of any agreement by your family members.
A durable power of attorney for healthcare similarly appoints a responsible party to act on your behalf for making health care decisions, if you are no longer able to do so yourself. It’s more powerful than a living will, since it’s in writing, and is compliant with state law.
A durable power of attorney, whether for financial or healthcare purposes, should always be prepared by an attorney to make sure that all potential circumstances and situations will be covered. For example, a simple power of attorney is usually for a limited duration, and applies only in named circumstances. You’ll have to make sure that the power of attorney is ongoing, and will cover all possible scenarios.
When to update: These documents should be reviewed annually, to make sure that they are consistent with your circumstances. They should be updated anytime there is a significant change in your situation, including your choice of the person or persons who will act as your power(s) of attorney.
A HIPAA Release
A HIPAA release doesn’t enable anyone to act on your behalf. But it does enable care facilities and medical providers to release your health information to designated parties. The release will enable medical providers to release information to the parties you designate. This might include children, grandchildren, extended family members or close friends, at your choosing.
Healthcare providers and care facilities will not release this information automatically, since doing so comes with heavy fines.
When to update: Any time there is a change in the people or parties to whom you’re willing to have health-related information released.
Divorce or Bankruptcy Documents
Divorce and bankruptcy documents can seem to become irrelevant as the years pass. However, they can have a way of sneaking up on you at unexpected times.
For example, the contents of a divorce decree could become relevant at the time of your death. Bankruptcy documents can become important should a creditor assert a claim against you or your estate years after your bankruptcy was discharged. Since your bankruptcy documents list each creditor included in the discharge, it represents a permanent record that a debt is discharged. Absent that documentation, a creditor could conceivably reassert a claim.
When to update: There’s generally no need to update these documents, since they are for closed events.
Copies of Income Tax Returns
CPAs and tax attorneys generally recommend that you retain copies of income tax returns for at least seven years. But if you are self-employed, or you’ve had a relatively complex tax situation in the past, you may want to retain your returns indefinitely. They may be your best protection – and only written documents – in the event that there are any tax or financial questions years after the fact.
When to update: There’s no need to update income tax returns. But you should add your most recent year’s tax return to your saved documents for any year in which you file.
Personal and Financial Records
The National Institute on Aging has a long list of personal and financial records that older adults should have available. Some the less obvious items (or those not already listed above) include:
- Evidence of your Social Security number
- Your birth certificate
- Names and addresses of your spouse and children
- Location of birth and death certificates, as well as certificates of marriage, divorce, citizenship and adoption
- Employers and dates of employment
- Education and military records
- Names and phone numbers of religious contacts
- Memberships in groups and awards received
- Names and phone numbers of close friends, relatives, doctors, lawyers, and financial advisors
- Medications taken regularly (be sure to update this regularly)
- Location of a living will and other legal documents
- Sources of income and assets (pension from your employer, IRAs, 401(k)s, interest, etc.)
- Social Security and Medicare/Medicaid information
- Names of your banks and account numbers (checking, savings, credit union)
- Investment income (stocks, bonds, property) and stockbrokers’ names and phone numbers
- Liabilities, including property tax—what is owed, to whom, and when payments are due
- Mortgages and debts—how and when they are paid
- Location of original deed of trust for home
- Car title and registration
- Credit and debit card names and numbers
- Location of safe deposit box and key
When to update: Anytime there are changes in the circumstances related to any of the above documents.
As you can see, organizing important documents as you age is a fairly complicated process. Use this list as a guide, and refer to it at annually to make necessary updates. Properly updated documents will be important as you age, both to you and to your family members.