As Smithtown probate attorneys, we take our responsibility to our fellow community members very seriously. We go the extra mile to educate people about the importance of preparing for the eventualities of aging, and we also do everything possible to provide information about estate planning.
There are many different intricacies to consider, and this is why personalized attention is very important, because each case is different. That being stated, there are some generalities that apply to just about everyone, and we will take a look at them here.
When you think about estate planning, documents are going to come to mind first. However, in order to be able to leave inheritances to your loved ones, you have to retain your assets throughout your life. There is an enormous expense that you may face during your twilight years that can consume everything that you have always intended to bequeath to your family members.
Most senior citizens will rely on Medicare is a source of health insurance during their retirement years. At the time of this writing, the age of eligibility is 65, but there have been discussions about raising the age to reduce spending. Medicare will pay for many health care expenses that seniors typically face, but there is a huge gap. This program will not pay for a stay in a nursing home or assisted living facility.
The majority of elders will someday need living assistance, and long-term care facilities are very expensive. In the Smithtown area, a year in a private room in a nursing home will typically cost in excess of $120,000, and it is not uncommon for people to require multiple years of care. Assisted living communities are also quite expensive. If you live in a long-term care facility for a number of years, the expenses can potentially erase all of your resources.
Medicaid is another government run health insurance program that will pay for long-term care if you can qualify. There are low income and asset limits, but if you take the right steps at the right times, you can protect your assets and qualify for Medicaid to pay for long-term care if and when you need it. This can preserve your legacy for the benefit of your loved ones.
The Next Step
A legally binding document that facilitates asset transfers to your loved ones after you are gone will be at the core of your estate plan. You may assume that a last will is the right choice for you, but in reality, there are a number of different reasons why you may want to consider a trust instead.
With a last will, you would be facilitating lump sum asset transfers to the people that are named in the document. There is no way to mete out resources over an extended period of time. This can be a source of concern if there are people on your inheritance list that are financially inexperienced or simply not very good at handling money.
The drawbacks of probate are another reason why you may want to take pause before you decide to utilize a last will as your asset transfer vehicle. Probate is the legal process of estate administration. A last will must be admitted to probate, and the court cannot authorize the release of inheritances until the estate has been probate and closed.
Inheritors can be in for a long wait, because simple cases can pass through probate in perhaps nine months to a year, and complications can extend the process. Speaking of complications, anyone who wants to contest a will can come forward to make a case during probate, and this is another one of the negatives. Considerable expenses can accumulate when the estate is being administered, and this is a third pitfall.
You can avoid all of these difficulties if you utilize a revocable living trust instead of a last will as your primary asset transfer vehicle. The trustee that you name in the document would be able to distribute assets to the beneficiary or beneficiaries outside of the costly, time-consuming process of probate. Plus, you can include spendthrift protections when you establish a revocable trust. It would be possible to instruct the trustee to distribute assets to the beneficiary incrementally on an ongoing basis.
Incapacity planning is the third piece of the puzzle. A significant percentage of people become unable to make sound decisions at some point in time, with Alzheimer’s disease being the major culprit. You could include a living will to state your wishes regarding the utilization of life-support measures, and you can add durable powers of attorney to name people to act on your behalf in the event of your incapacitation.
Our Smithtown probate attorneys are holding some free seminars over the coming weeks. If you would like to learn more about estate planning, click this link and register for the session that fits into your schedule.
- Three Tips to Provide Inheritance Planning Insight - June 11, 2021
- Veterans Pension Can Defray Long-Term Care Costs - June 7, 2021
- How Can a Special Needs Trust Trustee Use the Funds? - June 3, 2021