Navigating an elder law estate plan revolves around crucial questions that shape your choices. Firstly, it addresses the fate of your assets after you pass away. How does a person bequeath their assets, their personal treasures and lifetime of personal belongings to their loved ones, family, house of worship and charities? Is it through the use of a Last Will and Testament or one or several Trusts?
Secondly, it anticipates the scenario of needing long-term care and how it might impact your assets. The days of living and dying still occur except it is living longer and dying more slowly. Looking at your own family and the family of friends, we have all seen death preceded by a long-protracted illness. The type of illness and lack of proper medical insurance or the need for long-term medical insurance is what depletes family assets.
A well-rounded plan seamlessly addresses both aspects, ensuring not only the smooth transfer of assets to your beneficiaries or loved ones but also safeguarding them from being depleted by long-term care expenses.
Securing long-term care insurance stands as the most effective defense against the financial challenges associated with extended care needs. When contemplating this insurance option, critical considerations involve defining an appropriate daily benefit amount and incorporating an inflation rider to match the escalating costs of nursing home care. Notably, long-term care insurance goes beyond by covering the expenses of home health aides, empowering individuals to gracefully age within the familiarity and comfort of their own homes, steering clear of the need for relocation to a facility.
In case you’re unable to obtain long-term care insurance, there’s a backup plan called Medicaid Asset Protection (MAPT). Assets held in MAPT for at least five years are shielded from nursing home expenses, and upcoming laws may extend protection to two and a half years for home care.
Explore the option of using trusts instead of wills to bypass probate, which is a legal process initiated when you pass away with assets solely in your name. Trusts are harder to challenge than wills, especially if you’re disinheriting a child. In general, trusts streamline the estate settlement process, saving both time and money.
Opt for Inheritance Protection Trusts when leaving assets to your children instead of direct distributions. These trusts serve as a protective measure during your children’s divorces, ensuring that in the unfortunate event of your child’s passing, the inheritance is preserved for your grandchildren rather than being vulnerable to claims from your children’s spouses.
As I practice it, Elder law estate planning is a comprehensive approach tailored to address the unique legal and financial concerns that individuals face as they age. Moreover, elder law estate planning aims to mitigate potential tax liabilities, ensuring that as much of the estate as possible goes to the intended heirs rather than being depleted by taxes or other financial burdens.
In essence, an elder law estate plan does three main things: (1) safeguards your assets from long-term care expenses, (2) passes assets to your heirs while minimizing taxes and legal fees, and (3) ensures your grandchildren inherit while shielding the legacy from your children’s divorces.
Elder law estate planning offers a holistic approach to secure the well-being of seniors, protect their assets, and provide a clear roadmap for the distribution of their estate according to their wishes. By taking a proactive stance, individuals can steer the complexities of aging with confidence and ensure a legacy that aligns with their values and go
