Every person has their unique estate planning DNA. There is no cookie-cutter, one-size-fits-all estate plan. Every situation is different. Where people are starting in the process, where they want to go and issues that stand in the way are all different for each of us. There is no ‘one size fits all’ solutions. This is why you should discuss the possibilities with an experienced estate planning lawyer.
At the same time, there is a certain framework that applies to everyone, and we will look at the basics in this post.
Address the Eventualities of Aging
Your estate plan cannot properly be constructed if you do not consider the expenses that you may face during your twilight years. Most senior citizens will require living assistance eventually, and 35% of elders ultimately reside in nursing homes.
These facilities are very expensive and remember – Medicare does not pay for long-term custodial care. Medicaid does cover living assistance but it is a need-based program. You cannot qualify if you have significant assets in your name.
People often try to transfer assets to their loved ones in order to qualify for Medicaid to pay for long-term care. Acting in advance is critical. There is a five-year look-back period, meaning all gifting must be completed at least 60 months before you submit your application for coverage. An application prior to the 60 months will require some spend down of your assets. That means you cover the payments of the nursing home for a period of time before you qualify.
Advance Directives and Powers of Attorney for Healthcare
Your plan should include a Living Will, often referred to as an Advance Directive. The Living Will addresses three specific situations, namely when you are terminal, persistently unconscious, or are approaching an end-stage condition in life. The question is: when two doctors say you are in one of those situations, do you, or do you not, want to be kept alive on a machine? Remember, every person has their own estate planning DNA. Likewise, everyone has their own health care and end of life DNA. But, you should decide. It removes a great burden for your loved ones if you have clearly stated your intentions.
Your estate plan should include provisions that protect you in the event you become disabled or incapacitated. This can be accomplished by the use of a durable power of attorney for healthcare.
The agent that is named in the power of attorney would be able to make medical decisions on your behalf in the event of your incapacity. A HIPAA release should be included to give the agent and others the ability to speak freely with your doctors.
Make Broad Assessments
When you first start to enter the estate planning process, you should define your goals before you start to focus on the details. You have to determine what you are leaving for your loved ones, who receives your assets, when they receive them, and who manages the process.
The life situation of everyone on the list is quite relevant. You may feel comfortable leaving a lump sum inheritance to some people, but you may have concerns about a spendthrift or someone with a substance abuse problem.
When you are leaving an inheritance to a family member that is married, you may want to consider the dynamic of their relationship. Along the same lines, if you have a blended family in your own right, your objectives may be a bit complicated.
These are a few of the things that can enter the picture, but there are others. As we stated in the opening, there are a lot of tools in the estate planning toolkit, so you should not assume that you are bound by limitations.
Asset Transfer Methods
Once the picture starts to come into focus with regard to what you want to accomplish, you have to decide on asset transfer methods. A simple will is usually not going to be the right choice for most people that have relatively significant resources to pass along to their loved ones.
When you compare various options, you will probably find that a living trust is a better option There are other types of trusts that can satisfy more complex aims.
At this point, you should start to look for an experienced estate planning attorney who can explain your options and help you make fully informed decisions.
Take Action Today!
If you’re ready to have that conversation, we are here to help. You can schedule a phone, Zoom or in-person complimentary consultation in Oklahoma City if you call us at 405-843-6100. The number in Overland Park, Kansas is 913-385-9400. We also have a contact form on this site you can use to send us a message.