In this podcast episode, we continue with the Wellness Series, kicking off the next two-parter episodes covering Financial Wellness. Specifically, we’ll talk about Wills and Power of Attorneys (POA).
Links to articles referenced in the episode:
- Financial Plan – Investopedia.com – written by Julia Kagan on 07/16/19
- 4 Reasons Estate Planning Is So Important – Investopedia.com – written by Donna Fuscaldo on 06/25/19
- Power of Attorney – Investopedia.com – written by Julia Kagan on 05/05/19
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EPISODE TRANSCRIPT:
Hello! Welcome to the Sally in the Zen podcast. I’m your host Sally and I’m a Zen Buddhist caregiver taking care of my elderly folks, in pursuits to find Zen moments in everyday living.
Now before we get into our episode today, let me do my normal disclaimer and say that everything I say in today’s episode are my opinions and my opinions alone. And I’m not sponsored by anybody or paid by anyone to say what I say in today’s episode.
And the reason why I put more emphasis on this disclaimer on today’s episode is because we’re starting off with our second tenet of the Wellness Series that we kicked off in January. In January’s two-parter episode that was focused on health and well-being. Now with the new month of February we’re kicking off the second tenet or second chapter of the Wellness Series, focusing on Financial Wellness because that’s pretty critical also.
The disclaimer is more so that we’re clear that I’m speaking only on a high level of what financial planning and estate planning are and that I am not an expert; I’m not advising anyone or making any type of recommendation to sell or buy or engage in any activities.
I’m just speaking from a personal standpoint on the importance of having a will and POAs, and overall an estate plan for you and your family. So if you interested, let’s get started.
Let’s start off with what is a financial plan? Now, the resources I will cite in today’s episode, I’ll, of course, include them in the show notes for your reference if you’re interested but let’s start with the basics.
What exactly is a financial plan or financial planning and how is that related to taking care of elderly folks? Now, specifically, according to an article written on Investopedia.com called Financial Plan written by Julia Kagan on July 16, 2019, a financial plan is a comprehensive statement of an individual’s long-term objectives for security and well-being and a detailed savings and investment strategy for achieving those objectives. A financial plan may be created independently or with the help of a certified financial planner.
Now, if you skip down to the actual crux of the article, the key takeaways noted here: a financial plan documents an individual’s long-term goals and creates a strategy for accomplishing them. The second bullet: the plan should be highly individualized to reflect the individual’s personal family situation, risk tolerance and future expectations. And the last bullet: the plan starts with a calculation of the person’s current net worth and cash flow.
But more specifically in terms of today’s topic, this is what I wanted to drill down to, and moving down the article: the following elements should be addressed and revised as follows.
First bullet: retirement strategy
Second bullet: comprehensive risk management plan
Third bullet: long-term investment plan tax reduction strategy, and
Last bullet: an estate plan.
This is actually the subject that I wanted to delve more into in today’s episode, specifically, the estate planning. Estate planning, according to another article that I found on Investopedia.com, entitled 4 Reasons Estate Planning Is So Important written by Donna (I’m going to slaughter her last name) Fuscaldo, written on June 25, 2019.
The key takeaways in this article says estate planning allows you to choose who gets what. Estate planning affords you the chance to name your children’s guardian in the event of an early death. Estate planning reduces taxes on what you leave behind and estate planning minimizes the chance of family strife and ugly legal battles.
And let’s talk about this. When you Google it, you know that it means life insurance policies, having a will, and all the other things that’s part of estate planning but from personal experience, I specifically think of having a will. That’s the most basic thing that you need to have in your estate-planning. Even if you don’t have assets, even if you don’t have money to your name, you have assets, you have a home you have material things.
And let’s just say you have those things, you want to give them to someone ,don’t you? Or do you want to be like Prince, who died with no will, and because there’s no direction from him, it’s now stuck in court. Or Aretha Franklin, when she died she didn’t have a will and her four sons had to file that document with the courts to name themselves as interested parties in her estate. But in both cases the real winner is always going to be the courts in the lawyers, not the beneficiaries, but this isn’t to say that you shouldn’t have a will just because you’re not famous or you don’t have that kind of money. No, I absolutely believe that everyone should have a will. At minimum
Let’s just say the answer is yes. You want to give it to your mother, your father, your husband or wife, then legally you should have something documenting what you want to have happen if you’re no longer here, especially importantly so if you have kids, but we’re not going to talk about kids. We’re talking about specifically older folks, like what I’m doing with Mom and Dad. So I’m a single person and absolutely I do have a will because I would like to leave my assets to my family but vice versa, Mom and Dad are the ones who instilled that belief in me to be organized about everything throughout life, so they are organized as well but as again, that’s a totally personal choice that each person needs to make up their mind about.
Now moving on to Power of Attorneys. As a caregiver taking care of elderly folks, while they’re still here, they still have to eat, they still have to go to the doctors, they still have to get medicine and they should also have paperwork with you so that you can help them do all of those things. And power of attorneys may be necessary because, God forbid, something were to happen, you need to empower someone to have the authority to take care of your personal items if you’re not able to do that yourself. Obviously if you’re healthy and you’re able-bodied, you’ll do all the things yourself but if you’re not, God forbid, you need someone who can help you but saying that, naming a POA is a very serious documentation because it gives total control, to a particular person that you named, overall in your name or your finances, your home. Yeah, I said everything, so you have to be careful about that, and let me take that back: there are two types of power of attorneys. You got Limited Power of Attorney and then the full Power of Attorney, which exactly what it sounds like. They have full authorization over everything under your name.
Now let me give a formal definition of what exactly a power of attorney is. Now going back to our trusty source Investopedia.com,also another article by Julia Kagan written on May 5, 2019. A power of attorney or POA is a legal document giving one person (the agent or attorney-in-fact) the power to act for another person (the principal) the agent can have brought legal authority or limited authority to make legal decisions about the principal’s property, finances or medical care. The power of attorney is frequently used in the event of a principal’s illness or disability or when the principal can’t be present to sign necessary legal documents for financial transactions and, of course I’ll link this source on the show notes.
Because POAs are such powerful legal documents, everyone looks at it very seriously because, nowadays, of the event of elder fraud. That’s a key thing that’s happening nowadays, that elders, the elderly senior citizens are taken advantage of by, unfortunately, their family, their friends or whoever they named as having full power of attorney over them. And that’s unfortunate but once again it points to how serious this document is and that it needs to not be taken lightly.
In our particular situation, we had long talked about these things openly, gosh, when I was younger, beginning when I was younger. Mom and Dad were pretty open about supporting each other, making sure that all our ducks were in a row. Now Mom and Dad are pretty progressive and what I mean by that is, in Chinese society, especially in their generation, it was taboo to talk openly about life insurance, to talk about setting up a will, an estate plan for the family because, traditionally, in the old days with the older generation, that was like putting a jinx on you, if you would have talked about what happens, when you pass on, what happens to the family, who takes care of what, you don’t talk about that. Those were things that you just don’t talk about because that was playing bad juju on you.
Chinese people are also a superstitious lot and they will actually take a broomstick to you and chuck you over the head with it. And I mean that actually quite seriously because they don’t want any kind of bad juju over their house or over their name. Hence, life insurance, you can figure, back then was not a very popular business, was not a business at all in Chinese society. But times have changed. People are more talking about it, more open to the idea about it especially the younger generations. So especially like my, I wouldn’t consider myself the younger generation, but I am a step down from Mom and Dad’s generation but overall the society has opened up having that kind of legal document to take care of family.
Now at this point let me just talk really briefly about these two documents. Now first just let me say, because of our particular situation, and because of how I am, I actually built out our own simple will, for each of us. I didn’t use an attorney, and this is not me at all advising that you should use an attorney or shouldn’t use. That’s totally up to you but in our particular situation, I’m saying that I was knowledgeable enough that I knew what I was doing to compose our own. So if you want to do it yourself, you just need to make sure that for your two particular state, you cover all of the statutory requirements that are needed to make your will in your state valid because if you choose to do your own, you can’t just willy-nilly put things into it. You have requirements that need to be in there and I totally advise that you do a little research into it or just hire a lawyer to do it.
Now in terms of the power of attorney, that’s a pretty critical document that we chose to get. Because I’m their daughter and caregiver, it was a good idea to have a POA in place so that I can help them better. This is a totally family decision. This is a very personal decision that we made but the bottom line is, it’s a personal choice whether or not a family has a POA. It’s also a personal choice obviously to have a will completed.
Now that’s it for today’s episode. For our next episode, we will finish up on Financial Wellness, speaking specifically about a different type of POA. And this is regarding the health care POA. It’s also called an Advance Directive which delves into whether or not you wanted to be resuscitated, how you want your remains to be treated, and a little bit more about that but brace yourself, next episode is going to be a little bit more sensitive because we’re essentially talking about end-of-life treatment.
I hope you enjoy today’s episode. If you have any questions or comments, drop me a line on my blog on my Contacts page or you can DM me on Instagram. If you have any ideas for future episodes that you want me to talk about, just let me know and maybe I’ll feature that in a future episode. Thank you so much for joining me in today’s episode and in my pursuit to find Zen moments in everyday living. Talk to you next time.
