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Estate planning is for everyone. But as the years pass, you may become more interested in how to plan your estate. It’s important to plan for the future and know what you can do to prepare for a future season where you might need comprehensive medical care, nursing home care, or when you pass.
However, there are many factors that prohibit people from planning their estate. It’s pretty common for people to procrastinate and push off this critical planning. Sometimes, lack of knowledge or too much information creates a challenge to plan one’s estate. In other cases, it’s easy to ignore the need.
But if you don’t take care of your affairs, the world will dictate what happens if you become incapacitated or pass away. The good news is, the law provides many opportunities for you to arrange your affairs to your advantage and protection. You just need to know what you want. And it must be done in writing and right (according to the law).
The four basic estate planning concepts you need to know are management, documents, long-term care, and death.
The first question to ask yourself is: Who will help you manage your assets and healthcare if you become disabled or pass away?
If you pass away or become incapacitated, who do you want your possessions or investments to go to, for example?
If you can’t make decisions, who do you want to make them for you? Does this person know your wishes and will they carry them out?
If you have to pay for long-term care, do you have investments or accounts set up to handle that? Who will have access to those accounts?
For families who have special needs children and you leave them some of your wealth, will that gift be a problem for them? Will it make them ineligible for benefits? Would it be better to set up a Special Needs Trust for them or not leave them anything?
You can leave a gift tax of $16,000 per person per year and not have to worry about even filling out a gift tax return. This is a good way to distribute your estate. And if you plan it right and set it up correctly, you can avoid Medicaid penalties.
Most people have a will. Make sure it’s current.
These documents state where you want things to go when you pass.
They must be properly written and signed.
You can also use a probate court guidebook to help you map out your estate needs.
Or ideally, work with an estate lawyer.
A trust can help you avoid probate court and increase the efficiency of the estate process while protecting your assets.
There are many types of trust options and each one does something different.
Trusts can protect you and your heirs from income taxes and creditors (if the document is properly drafted) and provide for special needs.
This document empowers someone to make financial decisions for you now or if you're incapacitated.
Make sure you regularly update a financial power of attorney.
Understand what powers are given and how much they can do.
Ensure that the designator knows your wishes.
Similar to the financial powers of attorney, these documents afford healthcare decision-making authority to someone you name.
Consider carefully to whom you give this power. Will they make good decisions for you? Do they know what you want done and not done medically? For example, you could outline that you never want to die or that you never want to live in a vegetative state depending on machines.
Be sure to regularly update names, addresses, and phone numbers.
This document is for end of life planning.
Two doctors must approve its use.
It should outline things like if you want to be fed, limited to nutrition, or be allowed to pass. Be sure to focus on comfort care, too.
If the time comes for you to require long-term care, it’s important to be financially prepared for it in advance, as nursing home care now costs between $8,000 to $10,000 per month.
There are several ways you can help pay the costs of long-term care.
Insurance: You may still be able to get it; however, the longer you wait to purchase it and the older you are, the more expensive it will be.
If you have a policy, what are the benefits? Does it cover assisted living, nursing home care, and is it comprehensive? Is it tied to a life insurance policy where I can get a benefit? What is the per month, total cap, and elimination period?
You may be eligible for veteran benefits if you are a war-time veteran or the spouse of one.
MedicaidFederal program that pays for LTC if you qualify.
Talk to your family about placement. Where do you want to go and where are you able to go? Your options include home health (or getting help to come into your home), independent living (with some housekeeping provided), assisted living, memory care, and/or nursing home care.
You can work with an elder law attorney to make arrangements for your affairs upon passing. An attorney will talk to you about options like:
Estate administration, such as trust administration (to avoid probate), probate administration, and beneficiary designations are designed to help all avoid probate altogether or to get outcomes you want.
Probate avoidance can help to lower the total costs associated with your estate, and reduce the time, stress and hassle for your family, while giving you more control over your estate, too.
Estate tax protection. In the state of Ohio, there is now no estate tax (unless you make over $12.06M).
Special needs. Be sure to provide for your special needs family members with special needs trusts. For example, you can set up a STABLE account that is flexible for use by the disabled and protects their benefits.
Asset protection can be put in place to protect you, your spouse, and your heirs from creditors, predators, and nursing home costs.
You can trust Wylkan Estate Planning. We are one of only 27 board-certified Elder Law lawyers in the state of Ohio, so we’re uniquely qualified to work with seniors and anyone else planning their estate. Contact us to get started today!« Back to Blog