Advanced planning – more important than you might EVER imagine

Laurie MacNaughton © 2022

Most everyone agrees the best time to plan is before a crisis occurs. It’s not that mid-crisis planning is impossible – but it’s often true that the more urgent the problem, the pricier and more complex the fix.

Following are important steps to take before a crisis arises.

The first is to record all administrative information on one master list. Then, make sure your family knows where to find this list. If they don’t know where to find it, the list is worthless.

Include on this list:

  • The name of all banking, or other financial institution, relationships;
  • Mortgage and line-of-credit information;
  • The name of any pension plan, life insurance plan, investment account, and health savings account, along with account numbers;
  • All income sources, including Social Security, annuities, pensions, veteran’s benefits, and the like;
  • All financial obligations, including credit cards, car payments, and utilities, along with the names of the utility providers;
  • Usernames and passwords for all online accounts;
  • Copies of driver’s licenses, social security cards, healthcare cards, birth certificates, divorce decrees, or death certificates, as applicable;
  • The names of primary care physicians over the past 10 years. The current physician may well be different than the one used a decade ago. (I will say more about this, below.)

The second step is to meet with an attorney regarding the following documents:

  •  Power of Attorney (More about this, below)
  •  Will
  •  Advance medical directive
  • HIPAA release

If these documents already exist, review them and have an attorney make necessary updates.

Note: Not all attorneys routinely deal with advanced planning. Specialists in this field typically fall under the category of elder law. A full list of Virginia elder law attorneys can be found here:

There’s something important to know about a Power of Attorney: for many applications, in order to use a Power of Attorney, a physician’s letter is required stating the Principal has become incapacitated. This letter serves as a safeguard against a bad actor who might try to exercise a Power of Attorney behind your back. In the letter the doctor must state that, at the time you signed the Power of Attorney, you were mentally competent to do so. This seems insulting to the attorney who drew up the Power of Attorney, but there is no fighting this requirement. It also means your doctor must have access to medical records going back to the time you signed the Power of Attorney.

If no one knows who your physician was at the time your Power of Attorney was signed, an adult child – or other responsible party – may well need to become your guardian, conservator, or both. Over the years I have had dozens of adult children have go this route, and it can be a pain in the neck. Going to court is typically slower, and is certainly more expensive, than getting a “Letter of Capacity” from your doctor.

Another item of note is the following: in order to use a Power of Attorney when applying for a mortgage, the original Power of Attorney document must be available. A copy is not acceptable, regardless of state law. If the original document truly is not to be found, there are remedies; however, the fix requires the services of an attorney and will carry a price tag.

As I’ve said, many issues can be fixed. But if you’re sick or incapacitated and someone must run interference on your behalf, both time and money are likely to be at a premium.

In a utopian world there would be no aging, sickness, financial hardship, or death. But in this world we inhabit, a little planning and forethought can avert a lot of pain, a lot of hassle, and a lot of unnecessary expense.

If you would like more information on this topic, or if you would like to look into how an FHA-insured reverse mortgage might help with financial needs in retirement, give me a call. I always love hearing from you.


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