Most people are going through life without an estate plan, and it is not always because they are irresponsibly shirking a responsibility. In many cases there is so much to take into account that it can be hard to know where to begin.
With this in mind we would like to look at four prime estate planning/elder law concerns.
Long-Term Care Costs
It is important to address the period of time that is typically called the “twilight years.” The majority of elders will need some form of long-term care, and about 40% of senior citizens will eventually reside in nursing homes.
Long-term care is extremely expensive, and many people are surprised to hear that Medicare will pay for nothing more than 100 days of convalescent care. At an after-tax cost of $60,000 per year, or more in many areas, this can decimate an estate pretty quickly.
This is a matter that you should certainly discuss with your estate planning lawyer.
Incapacity Planning
Another one of the eventualities of aging that you should be concerned about is the possibility of becoming incapacitated at some point in time. The state could be petitioned to appoint a guardian to make decisions for you if you take no steps to choose your own potential decision-makers.
That’s not an attractive result. You can designate your own agents to make decisions for you through the execution of documents called durable powers of attorney.
Taxes
People who have been successful throughout their lives must consider the possibility of leaving behind estate tax exposure. Right now the maximum rate of the federal estate tax is 40%, and the exclusion is $5.25 million. This law has been changed many times and your plan should take into account what happens is the exclusion is reduced again.
Probate
Probate is the legal process of estate administration. This process can be costly, and it is time-consuming. It is also public, allowing for anyone to access the probate records to pry into your final affairs.
It is possible to arrange for asset transfers outside of probate, and this too is something that you may want to discuss with your estate planning attorney.
Larry Parman
Author, President and Founding Attorney
Parman & Easterday
- Estate Administration 101 - February 2, 2023
- Why Do You Need an Elder Law Attorney? - January 31, 2023
- Inheritance Planning for Blended Families - January 26, 2023
