News & Events

Plenty of reasons to do elder law estate planning

By: Bonnie Kraham

Elder Law Associates Newsletter dated August 25, 2017

Elder law estate planning evolved from straightforward estate planning that was once only for the very wealthy. Elder law grew out of protecting the middle class from high nursing home costs. The field of elder law estate planning now serves all, not just the wealthy.

Here are the top reasons for a comprehensive elder law estate plan:
 
Your estate goes to whom you want, the way you want, when you want.
 
You benefit people and organizations you hold dear.
 
You show your family you cared enough to plan ahead for them so that they have less to do and organize if you become disabled, if you ever need a nursing home, and when you die. The “sleep better at night” value means you have peace of mind, knowing you planned properly to not be a burden on others, or to at least be less of a burden.
 
You save your heirs time, legal fees, court costs and family disputes when the time comes to settle your affairs. Trusts, rather than wills, avoid a court proceeding on death called probate, meaning you also save time and money.
 
You protect your home and other assets from being lost to your nursing home costs. If you don’t have, or can’t afford, long-term care insurance, you may create a Medicaid Asset Protection Trust (MAPT) that protects assets in the trust from nursing home costs after five years. Absent the insurance or the MAPT, your children may have to “spend down” your assets paying for your nursing home costs.
 
You leave your IRA’s and other retirement funds to your family, possibly for generations, using the “stretch value” of your IRA. If you leave an IRA to a child, age 30, she can “stretch” the IRA payments over her lifetime, allowing the IRA principal to increase many times in value. She can then leave it to her children.
 
If you create an “Inheritance Trust” for each of your children, you keep the inheritance in your own bloodline and protect it from your children’s divorces, lawsuits and creditors. If you leave assets outright to your children, the inheritance could end up with a surviving spouse of a child who remarries and leaves it to a new spouse, and the inheritance is also exposed to your children’s financial troubles.
 
You are protected if you are disabled and can no longer make your own decisions. You avoid a guardianship proceeding that may be costly, lengthy, and have a judge appoint a legal guardian for you, sometimes a stranger.
 
It is easy to procrastinate. A false sense of security may lull us into complacency because everything is going fine, we’re healthy, and life is good. Excuses abound. “Longevity runs in my family, I have plenty of time to plan.” “No one in my family ever went to a nursing home.” “My daughter will take care of me if I get sick.” The problem is anything can happen at any time to upend our life through death or disability of ourselves and others. The answer is to plan ahead to mitigate the worse-case scenario.
 
Article source: recordonline.com