Retirees are dropping the ball on crucial legal documents.
While barely a majority of retirees — 52% — have a last will and testament, most lack other crucial documents, according to the Transamerica Center for Retirement Studies’ 24th annual retirement survey.
Transamerica surveyed around 10,000 adults and found that the following important documents are absent from a majority of retiree households.
1. Medical power of attorney or medical proxy
Retired survey respondents who have set forth this type of legal document in writing: 43%
Why you need it: A medical power of attorney or medical proxy allows someone you name to make medical decisions on your behalf should you be unable to make them yourself.
Situations where this designation becomes important include when you are:
- Terminally ill
- Seriously injured
- In a coma
- Diagnosed with dementia
- At the very end of your life
This type of designation ensures you get the care you want, and it helps loved ones make decisions on your behalf during stressful situations.
2. Advance directive or living will
Retired survey respondents who have set forth this type of legal document in writing: 41%
Why you need it: An advance directive or living will helps medical professionals to understand your preferences for end-of-life care if you are unable to express these wishes due to an accident, illness or other condition that prevents you from responding.
The provisions in these types of documents only go into effect if you cannot communicate your wishes. They might detail:
- The types of care and treatment you want — or want to avoid — during emergencies
- The precise circumstances under which your choices would go into effect
3. Financial power of attorney
Retired survey respondents who have set forth this type of legal document in writing: 39%
Why you need it: A power of attorney is a legal document that allows someone you name to make financial decisions on your behalf.
Choosing someone trusted for this role is important. If you do not have a power of attorney, it’s possible that your loved ones will need to go to court to have a guardian appointed to make these decisions in the event that you are incapacitated. That can be time-consuming and expensive.
4. Funeral and burial arrangements
Retired survey respondents who have set forth this type of legal document in writing: 29%
Why you need it: Few of us like to think about dying, but it is a reality for everyone. If you do not clearly detail your funeral and burial wishes, it’s possible that these arrangements will be made in a manner that is at odds with what you prefer.
Some people do not have strong convictions about their funeral and burial. But if you feel otherwise, you should make sure to get your wishes down in writing.
5. HIPAA waiver
Retired survey respondents who have set forth this type of legal document in writing: 27%
Why you need it: A Health Insurance Portability and Accountability Act (HIPAA) waiver allows doctors and insurance companies to share information with people you designate.
Such a document can become important if you are incapacitated and cannot talk to someone else about your own care. It also allows medical professionals to provide loved ones with updates on your condition should you be hospitalized.
6. Trust
Retired survey respondents who have set forth this type of legal document in writing: 21%
Why you need it: A trust is an arrangement in which a third party holds assets that are designated for one or more beneficiaries.
Trusts are often used in estate planning and typically avoid probate. That means beneficiaries can access assets more quickly. In some cases, using a trust also creates tax advantages.
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