Preparing key documents for your healthcare and financial future

The recent coronavirus pandemic made a lot of people think about their healthcare and estate planning wishes. Websites and attorneys saw huge upticks in the number of people creating estate planning documents.¹ And while having a will is key, there are several other important documents—including those of the financial variety—that retirees should consider to make sure their wishes are known in case something happens to them. 

"With COVID, everyone has had this 'what if' sense in their minds," says Colleen Carcone, Director of Wealth Planning Strategies at TIAA. "When you want to prepare for the unexpected, you need to think of two components: First, you want to make sure that if something happens to you and healthcare decisions need to be made that your loved ones know what your wishes are. And second, if someone needs to take over your finances, they need to be able to know what to do and how to do it."

From the healthcare side, the main documents you'll want to consider are:

• A healthcare directive or living will, which provides general healthcare instructions to your doctor or other physician if you can no longer make decisions on your own.
• A medical power of attorney (POA) or healthcare proxy, who can discuss your treatment with medical providers and make healthcare decisions on your behalf that align with your wishes if you can't make them yourself.

Suppose you've already drafted these documents in the past. In that case, it may be a good idea to revisit them regularly to make sure they still reflect your wishes, especially in changing times where medical technology is improving rapidly, providing new types of treatments in cases of incapacity.

Don't forget the financial side

Your TIAA financial advisor can help you with the financial part of the equation. It starts by naming a durable POA specifically for your financial matters. You want to be sure that your power of attorney is "durable" so that your agent can act if you become incapacitated.

How do you decide who to tap for this important role? Carcone says that it may be smart to consider someone with some financial knowledge—you wouldn't want to put someone in charge of your financial affairs who had little experience managing their own, for example.

You'll need an attorney to create the actual documents, but be sure to talk to your financial advisor about your decision. They can help you partner with your attorney and identify specific areas in your portfolio that may need attention.

Once you've named a POA, you want to set them up for success. Whomever you name will need to know where important paperwork, account information, and passwords are located.

"Make sure you're making their job easier for them," Carcone says. "The designation doesn't help if the person doesn't know where your money is." She suggests providing your POA with a list of important phone numbers, which should include your financial advisor. And make sure your advisor knows about the arrangement ahead of time, in the event something unexpected were to happen to you.

"Your advisor is going to be able to also step in and help take some of that burden off your family," Carcone notes. She adds that if you hold any assets in a trust, the trustee will have power over those even while your financial POA handles the rest of your money matters.