You’ve got your will and your durable power of attorney. But you’re not finished quite yet putting your legal affairs in order, right? Not until you complete your advanced directives.
This is often confusing for people and that’s not your fault. This group of legal documents are often referred to by different names. So, we’ll simplify this for you.
The name, Advanced Directives (plural), refers to a group of legal documents that provide direction by you in advance of needing them, including:
A living will is also known as an advance healthcare directive, personal directive, advance directive, medical directive or advance decision. It is a legal document in which you specify what actions should be taken about end-of-life medical treatment. It lays out the procedures (e.g. use of feeding tubes or respirators, CPR) or medications (e.g. pain meds, antibiotics) you want—or don’t want—to prolong your life if you can’t talk with the doctors yourself. A living will is there to step in when you’re still alive but in an unconscious or terminal state, unable to voice your medical care wishes.
Don’t confuse a living will with your will and last testament. Think of it like this: Your last will tells people what you want to happen after you die. A living will tells them what you want to happen while you’re still living.
Medical Power of Attorney
A medical power of attorney is also known as a healthcare power of attorney, durable power of attorney for health, or health care proxy. This is not unlike the power of attorney we discussed previously. In this case, it is a “limited” power of attorney, specifically for medical decisions. So instead of a piece of paper (living will) providing direction, you have a person you trust acting in your best interests while honoring your original wishes. So, you would need to have a conversation with them to make sure they know how you feel about important medical decisions.
Living Will or Medical Power of Attorney?
You can have both a living will and a medical power of attorney, but it could cause a conflict of interest. If that happens, your living will—your original wishes—will prevail over the power of attorney (paper over person). A living will is probably the best option if you do not have a person you can trust to act in your best interests. On the other hand, if you do have such a person, a medical power of attorney is a lot more flexible than a living will, and the person you trust will have a lot more power to do what’s best for you during crucial moments.
There are other legal documents to consider when putting your Advanced Directives in place:
It is difficult to predict the future with certainty. You may never face a medical situation where you are unable to speak for yourself and make your wishes known. But having an advance directive may give you and those close to you some peace of mind.
It gives an individual power to manage your legal and financial affairs while you are alive but incapacitated due to illness or accident. A DPOA ends at your death (that’s where the will takes over).
A power of attorney is a written document where you (the “principal”) allow another person (the “agent”) to act or make decisions on the principal’s behalf. The power of attorney can limit the agent’s power to specific actions, such as purchasing a car or selling your home. Alternatively, the DPOA can give the agent broad powers, such as handling health care decisions, financial transactions, and legal documents. You decide who you give the power(s) to and how much power you give them. Due to the powers involved, the agent should be someone you fully trust, whether a family member, friend, or advisor.
There are many varieties of power of attorney, but the durable is the only one that remains effective if you suffer an incapacitating illness or accident. Your agent acts on your behalf because you cannot. So, a DPOA is the only power of attorney you need.
A power of attorney is very flexible. You can change who you give the powers to and how much power you give them at any time. This is important because your needs and wishes may change.
Whether you’re getting a new will or updating a will, it makes sense to review your power of attorney, too. If you had a power of attorney with your late spouse and have not updated it, who is going to act in your best interests now? It is important that you designate another (you can have more than one power of attorney, by-the-way) immediately.
As mentioned in the first article, you can get a durable power of attorney at LegalZoom (www.legalzoom.com) starting at $35. Or try Rocket Lawyer (www.rocketlawyer.com) or www.findlaw.com if you want to do it yourself. Whatever method you choose, you will have to get the power of attorney notarized to make it legal.
A power of attorney is a powerful tool should anything happen to you where you need someone to act on our behalf. Life is uncertain, so the best way to combat that is to have a power of attorney.
Planning for what will happen when you die can give you the peace of mind that comes from knowing that your loved ones will be cared for and your property will be distributed according to your wishes. Because laws relating to estate planning vary from state to state, you should consider consulting with a lawyer licensed in your state about setting up plans that will work best for you.
You might think you don’t need a will because “I don’t have anything to give anybody after I die. What’s the point?” Even if you have few assets, you should have a will, which will make it easier for those you leave behind to settle your estate. In this case, you’re not getting a will for you; you’re getting it for them. Without a will, what you do own will be “intestate,” and your family members will have to then work with the state, making a difficult time even more painful. With a will, you avoid this and possibly probate, too.
A will is a legal document that provides for the distribution of your assets when you die. If you have children, a will also lets you name a guardian who will take care of them and their needs if you die while they are still minors. If you don’t make a will, the laws of your state determine how your estate gets distributed to your spouse, children, or other surviving relatives. If you have no living relatives, your property will go to the state. If you have minor children and pass away without a will, a court will decide who will take care of them.
So, this is serious stuff! If you have few assets, you can get a basic will at LegalZoom (www.legalzoom.com) for $89. That’s better than no will at all. Because the laws governing wills vary among the states, it’s a good idea to consult with an estate planning attorney to make sure that any will you make is valid. Don’t have an attorney? Visit www.findhelp.com, type in your zip code, and search for attorneys that will help you at no or reduced cost.
Now you have no reason for not having a will. If you have a will, but haven’t looked at it in years, please dust it off and update it. Life changes and so should your will. It should reflect what you have today and where you want it to go at some point in the future. Having a will, and keeping it updated, is peace of mind.
As a new-widowed person and single-parent with minor children, one of the first things you need to think about is guardianship – selecting someone to take care of your children should something happen to you. No one likes estate planning, especially soon after the loss of a spouse, but it could mean the difference between chaos and stability for your bereaved children. You must consider what you would want to happen to them should something unexpectedly happen to you. You can’t schedule an unexpected death, so the sooner you have this taken care of the better.
What Is a Guardian?
In most cases, a surviving parent assumes the role of sole guardian of your minor children. However, what if something happens to you? If you haven’t selected a guardian to replace you, the state will, and that’s probably not your preference. The guardian you choose should be over 18 and willing to assume the responsibility. Talk to the potential guardian about what you are asking before naming that person in your will. You can name a couple as co-guardians, but that may not be advisable. It is always possible the guardians may choose to separate at some later date; if so, a custody battle could ensue. If you do not name a guardian to care for your children, a judge will appoint one. Guardians are listed in your will, so the first thing to do is create a will if you don’t have one or update it with this information if you do.
What Is a Will?
A will is a legal document that allows you to transfer your property at your death. A will is a simple way to ensure that your money, property, and personal belongings will be distributed as you wish after your death. A will also allows you to have full use of your property while you are alive. You would work with an estate planning attorney to both create a will or update the one you have already. You will select a personal representative, also called an Executor, to manage and wind down your estate, resolving any debts and distributing your assets and property as you have directed in your will.
What do Guardians do?
A guardian will generally make similar decisions to what a parent could make for a child. This may include medical decisions and, for minors, other life decisions such as where to go to school. Guardians may also cover managing the child’s finances. A guardian is usually charged with providing for all of the child’s necessities. These necessities include providing food, shelter, clothing, and any other items that may be needed. Of course, most people consider a loving home and ample opportunities to succeed as necessities as well. In many cases, the guardian that is named by the parents (or appointed by the court) will personally take on the task of raising and caring for the child(ren). It is no menial task or responsibility; it is critical that you choose wisely.
Tips to Choose a Guardian
Selecting a guardian(s) for your child(ren) may be one of the most difficult tasks following the loss of your spouse. There is so much to consider given a guardian’s long-term responsibility to your children should you die while they are minor children. The following list includes a few important considerations when choosing a guardian (your attorney will have others).
What are the Steps for Naming a Guardian?
Now that you have considered the above factors and have a short list of potential guardians, you need to have several conversations with them. Some parents wish to keep their choice for a guardian a secret in order to avoid drama, which is a big mistake. Potential guardians need to be prepared for such a responsibility and they need to understand your expectations and what it will take to raise your children. Nobody wants, or deserves, this kind of surprise following your death.
You should understand that you can always change your mind. Life changes and people change. All parts of your will, including guardianship, can be updated whenever you choose. You don’t need court approval; you simply ask your attorney to make the changes and the cost is minimal.
It’s smart to revisit your choice of guardian every five or 10 years when you have a young child (annually if your child has special needs), but there are times when it’s especially important to consider updating your will, including divorce and remarriage, evidence of alcohol, drug or physical abuse, or criminal activity.
Lastly, put your wishes in writing. Start a “how to raise my child(ren) handbook” to help your guardians raise your children when you can’t. The more information you can provide, the less guessing there will be and your children will be raised as you would hope.
If you are now a single-parent with minor children, thinking about guardianship for your young children is important. Contact an estate planning attorney today to create a will, update your present will, and begin to take the necessary steps to select and add guardians to your will.
Whether you’re a single parent working outside the home, or a stay-at-home parent, the way to stay sane is to streamline your family responsibilities so you can do more with less. Maybe you’ll finally find a moment or two to finish that cup of coffee while it’s still hot! Here’s an A-to-Z guide to a few apps and websites you can trust to lighten the load.
This app can save you countless hours on two big tasks—sorting through children’s artwork and shopping for gifts. Gather children’s art, put it in a box Artkive sends you, and the company will photograph it and send it back in an 8.5” x 11” hardcover book you can give to aunts, uncles, and grandparents. It also scans all the art so you can access it from any device.
Common Sense Media can bail you out if you don’t have the time after a long workday to figure out which shows, movies, books, or video games are suitable for kids. This nonprofit website has thousands of reviews of apps, shows, music, and video games, written by educators or other experts who note whether they contain sex, violence, profane language, or other content that you may find inappropriate for your child.
Cozi Family Organizer
Cozi.com and its Family Organizer app allow you to sync everything from playdates to business meetings via a helpful tool: a calendar that lets you assign a color to each family member so you can see at a glance who needs to be where when.
Plan playdates, birthday parties, family gatherings, or a night out with friends. Doodle allows you to collaborate schedules with multiple people to see what days and times work best for all invited and saves you the stress that multiple text messages and phone calls bring.
Fatherly.com has become the go-to site for young fathers. It offers Webby award-winning content including videos, podcasts, articles and advice from experts like Melinda Gates and pediatrician William Series.
This app for children ages 4 and up uses friendly animated figures to help kids simplify their morning routines and get out of the house on time. It lets them check off tasks like brushing their teeth and getting dressed and, if you’d like to reward them for it, allows you to print out a certificate of achievement. Helpful and fun.
HealthyChildren.org is “the only parenting website backed by 66,000 pediatricians.” You’ll find general information written by leading child health experts on parenting, child health, safety and prevention, how to provide speedy symptom relief for minor illnesses or injuries, and more.
Lala Lunchox is an easy-to-use, child-friendly app that gets kids involved in planning their lunches by letting them make healthy food choices, such as picking a fruit, vegetable, protein, and snack. After they’ve weighed in, LaLa Lunchbox will generate a shopping list for you.
Your neighborhood is a living and breathing (hopefully thriving) neighborhood. Nextdoor is an app that brings communities together to greet newcomers, exchange recommendations, and read the latest local news. You can support local businesses, ask questions about vendors, find help and endless support. It’s easy to use and will help you build connections to make your life easier right where you live.
Shipt offers same-day (often “next hour”) delivery of groceries and sundries from local stores you shop. Download the app, shop online at any nearby grocery or department store that Shipt serves, select a time slot for the delivery, and your items will be brought to you during the convenient time you chose. The only extra charge is the tip (about 10%) you give your shopper who also delivers everything right to your front door.
UrbanSitter is an app that helps you find babysitters recommended by your neighbors, whether you need long-term childcare or just one night because your regular babysitter had an emergency. You can scroll though profiles or videos that sitters have uploaded, read reviews by neighbors, look for badges that show which sitters have passed a background check, check availability, and pay online. Care.com is another good website with an app to help you find sitters.
Zero to Three
Zerotothree.org is packed with helpful information for parents of children ages 3 and under, all backed by the nonprofit National Resource Center for Infants and Toddlers and Families. It has tips on early childhood development, articles on topics such as returning from parental leave, and a section for military families, including a Babies on the Home Front app that helps parents stay connected during deployment.
How a child reacts to living in a single-parent family depends on his or her age and other factors. Very young children typically have the easiest time adjusting because they have fewer memories of living with two parents, research has found. Teenagers often have the greatest difficulty. In most cases, they not only have spent more time with two parents, but they also have more complex questions and concerns about what happened.
Children of almost any age may feel guilt, anger, confusion, embarrassment, or other painful emotions about the change in your family. If you have concerns about whether your child’s behavior is normal, talk with a professional who can help you evaluate the situation. Even as you notice smaller behavioral changes, seeking help can be beneficial to start conversations about your child’s concerns before behavioral changes have a chance to become more significant. Both your child’s medical doctor and a counselor can be helpful to consult.
Here are tips to help your child adjust:
Being a single parent is a challenging responsibility to take on. Without the help of a partner to fall back on, single parents have so much more to do. However, studies show that growing up in a single-parent home does not have a negative effect on achievement in school. As long as the family home is a stable and safe environment, kids are able to excel and do well in life. You’ve suffered the worst loss possible, but so have your children and they need you more than ever. Follow these tips to take care of yourself and be the best parent possible for your children.
Becoming a single parent is a big adjustment. It can be challenging to raise a child as a single mother or father, but also rewarding. You are likely to have many questions as you adjust to becoming a single parent. How can you manage on one income? Where can you find help and support when you need it? If you have a child with special needs, your day be filled with additional challenges. How can you create a positive environment for your child(ren) while taking care of your own needs?
As you look for answers, remember that you are not alone. More than 1 in 4 households in the U.S. are headed by a single mother or father. This article has tips on how to thrive, not just survive, in your role as a single parent – something you never expected but a critically important job you now must do.
How you may feel about being a single parent
You may be grieving for your loss as you plan for a different type of life for your child(ren) than you had expected. Early in widowhood, grief can be overwhelming, and you may find it difficult to think straight let alone properly care for minor children. You will feel complex emotions that include shock, anger, guilt, loneliness, and fears for you or your family’s future. For example, you may be mourning your loss while at the same time feeling angry that you are now managing children on your own. All these mixed emotions are normal and very common. Fortunately, they are likely to become less intense as you adjust to your new circumstances. In the meantime, try to be patient with yourself. Keep in mind that even in households with two adults, many parents at times feel lonely or overwhelmed or wonder how they will cope with all the stress.
Here are ten tips on making the adjustment easier:
Being a single parent is a challenging responsibility to take on. Without the help of a partner to fall back on, single parents have a lot more to take on. However, studies show that growing up in a single-parent home does not have a negative effect on achievement in school. As long as the family is a stable and safe environment, kids are able to excel and do well in life. You’ve suffered the worst loss possible, but so have your children and they need you more than ever. Follow these tips to take care of yourself and be the best parent possible for your children.
At the time of this writing, inflation is pegged at over 8%. This is like losing 8% (annually), so without investments that might make up this loss, you are experiencing inflation risk – just one of many market and non-market risks associated with our financial wellness. When I hear someone say, “I don’t want to invest; it’s too risky,” I think they don’t understand it can be risky not to invest, as I’ve just illustrated.
Don’t get me wrong, investing carries risks, too. Unlike inflation risk, you have some say – some control – over how much investment risk you are comfortable with. Risk is inherent in stock markets, bond markets, and beyond. And where there is risk, there is often reward. That’s why investors invest – to build wealth, to send the kids to college, to gift to their church or favorite charity, to retire and live a comfortable life. So, what is investment risk, really?
Investment risk refers to the degree of uncertainty and potential financial loss of an investment or portfolio of various investments. When you invest your money in a stock, let’s say, the hope is that you will realize a return for having so invested. However, if you don’t receive the expected return, or even realize a loss, well, that was a potential outcome for that investment. Stock markets go up and down. If you bought a stock at an all-time high price and the stock market moved down, it is likely the price of your stock would move lower, too. On paper, it’s worth less than when you purchased it, even if nothing else changed – simply because the broader market declined in value. Thus, one of the cardinal rules of investing: buy low, sell high. That’s because the outcome will more likely be an investment gain than a loss if you purchase the stock at a (relatively) low price and hold it until you could sell it at a higher price and thereby realize a gain.
Types of Investment Risk
I just provided you an example of “market risk,” but there are different types of risk that can factor into the eventual outcome. This list is not all-inclusive, but below are some of the more commonly-discussed risks:
|Impact on Investments
|The tendency for prices to increase over time
|Future dollars (your investments) will not have as much buying power.
|The risk of outliving your savings
|The length of retirement is undetermined, making it tough to know how much money you’ll need.
|The risk of loss due financial market performance
|Stocks vary from day-to-day and year-to-year, which can have a negative effect on investments.
|Interest rate risk
|The risk to savings and loan rates if interest rates change
|For money you want to grow (investments), interest rate increases are generally positive.
|Credit risk (corporate bonds)
|The risk of default by the issuer of the bond
|Bondholders may not be paid the promised interest or the full principal.
Other types of risk include political and currency risk, business risk, economic risk, liquidity risk, and concentration risk. You have little control over these risks, and yet, you do have the ability to manage risk. You can not remove all risk from investments, but you can manage the amount of risk – amount of volatility your portfolio experiences – using several key practices:
The bottom line is all investments carry some degree of risk. By better understanding the nature of risk, and taking steps to manage those risks, you put yourself in a better position to meet your financial goals.
Once you’ve decided to invest your money, you still need to decide what type of investment you want, which is determined by your investment goal(s). Investment funds typically fall under the category of either growth or income. Commonly, these two investment objectives compete with one another. If your goal is growth, investors want all earnings kept in the asset since this allows the investment to grow faster (called “compounding”) while income investors want profits returned to them as income.
Growth investing is focused on buying appreciating assets, meaning you obtain assets you expect to increase in value. It takes time for assets to increase in value, so growth investing is considered a long-term strategy. You may have heard the term, “buy and hold.” If you bought $1,000 (at $18 per share or about 55 shares) of Amazon in 1997, and held that stock, today that holding would now be worth more than $2 million. Certainly, not all companies are this successful, but this example underscores the value of “buy and hold.” This is the essence of growth investing. “Technology stocks,” like Amazon, are a favorite among growth investors, but other growth assets include bonds and real estate. For example, your home is probably worth more today than when you bought it, right? Even if you invest in stocks that pay dividends you have the option of reinvesting those dividends in the assets and not taking them as income.
Younger investors, with a higher risk tolerance and an objective of building wealth, are typical growth investors. They have what is referred to as a “long investment horizon,” which simply means they have time on their side for investments to appreciate.
Income investors need the investment assets they have purchased to produce dividends and/or interest that they can “harvest” as income. Stocks and mutual funds that pay dividends, bonds that pay interest, real assets (like rental property) that pay rents and high-yield savings accounts are all examples of income investments. The trick is designing a portfolio that provides dependable income which, for example, retirees can count on. You may have heard the term “fixed income,” which is what someone late in life lives on.
While these investment goals may seem incompatible, growth and income investing aren’t mutually exclusive. Some of the best investments provide the opportunity to earn both types of returns. Many retirees have some of their portfolio in growth assets while they only take the income they need from the income-producing investments in the portfolio.
Growth vs. Value Investing
When choosing stocks or stock mutual funds for your portfolio, you will find they fall into two basic styles: growth and value. Growth investors look for fast-growing companies they expect to continue to grow at above-average rates. These are often, but not always, young companies (like Amazon in the late 90’s). Growth companies, because they are young, typically do not pay a dividend. Growth stocks are typically more volatile than the broader market. So, buyer beware.
Value investors are interested in companies they think are trading under their intrinsic value. They have fallen “out of favor” for some reason. Buying undervalued assets and selling them when they eventually become more fairly valued produces a profit. This type of investment can take longer to appreciate, but it’s considered somewhat less risky than the broader market. Usually, value stocks are well-established companies that do pay dividends. Having this dividend is quite nice, especially when the stock market is flat or under-performing (about 25% of the time). Again, the dividend can be re-invested if you are a growth investor or used for income if you are an income investor.
Growth and value investing styles complement each other well and having both can lead to a more balanced equity allocation in your portfolio.
There is an asset class, called “alternative investments,” that is worth a mention. Alternative investments can be growth, income, or both growth and income investments. What makes them unique (and often more costly) is that they often behave contrary to both the stock and bond markets. This simply means that when stocks (growth or value) are out of favor (the market is down), alternative investments may be appreciating. When the bond market is out of favor, as it is currently (bond prices fall when interest rates rise), alternative investments may be behaving just the opposite. Some alternative investments produce much higher interest than bonds or real estate; this should tell you that alternatives may by riskier than bonds or real estate.
Your portfolio may benefit from having a small allocation of alternative investments in addition to stocks, bonds, and real estate. Be sure you understand the investment and all risks entailed before committing any money to any alternative investment.
Should I Invest in Growth or Income?
The answer to this question depends on your stage in life, your risk tolerance, and your investment objectives.
If you’re younger and still desire to grow your nest egg, then focus on growth investments. If you are approaching retirement age and feel an all-growth portfolio is too risky, perhaps it’s time to have both growth and income investments. Later, in retirement, where the thought of losing any money at all gives you cause to shudder, your focus should be on safer, income investments.
Diversifying your investments is always a smart idea. Investing for both growth and income provides a balanced portfolio with the potential to make high gains with less risk of losing your hard-earned money.