Long-Term Care Asset Protection planning is a difficult and confusing process. Families make many mistakes when planning, usually, because they were given bad information from well-meaning loved ones, friends, and non-attorney professionals.
Thinking it’s too late to plan. It’s rarely too late to take planning steps, even after a senior has started receiving care at home, in an assisted living community, or a nursing home.
Giving away assets to children. First, it’s your money (or your house, or both). Take care of yourself first. When a child dies, becomes incapacitated, is sued, or gets divorced, they can no longer give money back to you when you need it. There are other ways to protect your money and remain in control of it.
Ignoring important permissible strategies created by Congress. There are many strategies authorized by Congress that people simply don’t know about. Unfortunately, space doesn’t allow me to explain.
Failing to plan for the spouse of a care recipient. If the spouse of a care recipient dies first, then the government benefits received by the care recipient are put in jeopardy. This can be avoided.
Applying for Government Benefits too late. This happens a lot. The family innocently uses funds to pay for long-term care that the government can’t count, so they lose tens of thousands of dollars. Know when to apply for benefits.
Not getting expert help. Long-Term Care Asset Protection Planning is a complicated field. Tens of thousands of dollars are at stake, sometimes more. It’s penny wise and pound foolish not to consult with an experienced and knowledgeable elder care attorney.
If you have any questions regarding this article, don’t hesitate to contact our office.
One of the greatest fears faced by aging Americans is that they may need a lot of care at home, in an assisted living or in a nursing home. This not only means a great loss of independence; it comes at a tremendous financial price. Nursing homes in Volusia and Flagler County cost over $100,000 a year.
Most people tragically end up paying for elder care out of their life’s savings until they are broke. Then they apply for Medicaid to pick up the cost. The advantage of paying privately is that you eliminate or postpone dealing with Florida’s bureaucracy–an often difficult, confusing, frustrating, and time-consuming process. The disadvantage of paying privately is that it’s expensive. People of ordinary means could lose everything that they have scrimped and saved to the nursing home.
Careful planning, though, especially in advance of an unanticipated need for care, can help protect your hard-earned savings, whether for yourself, your spouse, or your children. This is done by taking steps to make sure you receive the benefits to which you are entitled under the Medicare, Medicaid, and Veteran’s Administration programs.
Those that plan when they are not in immediate need of long-term care usually protect all of their life’s savings and quickly qualify for Medicaid benefits. Those that wait until they are facing long-term care costs might protect some of their life’s savings, but others may not be able to save anything. Don’t hesitate to contact our office with any questions you may have.
Month after month, you may read articles about the importance and value of estate planning. Congratulations! The message is sinking in, and you’re making a plan that will benefit your family for years, decades, perhaps generations, into the future.
So, at this juncture, the word “legacy” may be popping up for you. “Legacy Estate Planning,” as we call it in the financial services world, is about more than leaving resources behind to your family. It’s about strategically leaving resources for your family, so your estate can do the most good for the most years. It’s an honorable pursuit, and for most families, it’s an absolute necessity.
Legacy estate planning is not about money, it’s about intentionally planning for its use by those you love. It’s about setting up parameters and allowances; setting up rules and boundaries.
Your children love you, and your grandchildren love you, too. You want to leave them any and all inheritance you can when you pass from this world, but you have specific ideas on how it would benefit them most. In short, you realize they may need to get out of their own way to make the best choices with the resources you leave for them.
When you create a Legacy Estate Plan, you can include language and stopgaps that help your loved ones correctly manage the funds you have gifted them. In the documents you create with your advisor, you can set parameters for use of what by whom and when. If you’re worried about in-laws, include restricting language to that regard. If you’re concerned about someone being taken advantage of by another, put parameters in place to prevent it.
This is the beauty of the peace of mind you can experience with a Legacy Estate Plan. Help your loved ones help themselves, and create a space in the future where your estate can be its’ most effective in the lives of those you love most.
It’s time to plan. Do it in a way that’s worthy of your legacy. It’s this legacy, not the money, that will make the biggest difference in the lives of those you love. Don’t wait to contact our office with any questions you may have.
Depending on your relationship, it may be uncomfortable to approach your aging parents about their end-of-life choices, but do not put off his conversation. As our parents age it is critical we foster open communication on who they want to take care of them, how care should be provided, and the legacy they wish to leave.
Your parents will almost certainly have ideas and wishes to fulfill. You can help them ensure their goals are met but also can take the time to make sure they are prepared for an uncertain long-term care future.
When it comes to Florida estate planning, there’s a lot to consider. Offering support could be exactly what the situation needs. Whatever the case, starting the conversation is step one. This is only the start though. Your goal is to ultimately plan for how they will find good care should they need it and know how they will be able to afford it.
The earlier you can have this conversation the better. Let us share one way to break the ice:
“Mom, or Dad, would it be okay if we talked for a minute? I feel like it’d irresponsible of me if I didn’t ask you about your estate plan and future health decisions?”
Simply put, an estate plan includes anything the aging person owns and it puts into writing how they would like to distribute any available assets after they pass. It also can include a financial power of attorney and a healthcare power of attorney. Both are documents allowing a named individual to make financial and healthcare decisions on the person’s behalf should he or she become incapacitated.
Consider continuing the conversation with this:
“Your estate plan is important to me, but it is more than that. I am worried that you may one day need long-term care. I think we need to start talking now about how we will find good care and be able to afford it.”
This conversation may catch your parents by surprise. Reassure them. Let them know that you are not trying to pressure them into making an immediate decision but you do want to open the conversation. Discuss with them how this type of care, which could become necessary in the future, can be expensive, and involve considerable inconveniences during an emotionally difficult period.
Share with them that if they do not have Florida estate planning documents that contemplate future elder care needs, much of the planning they need may not be possible. In fact, they may be at risk of not being able to save any of their assets from being depleted on the cost of a nursing home. Encourage them though that together you can create a plan with their elder care attorney to ensure that they are provided for under any potential future circumstance.
It may not be easy to talk to your aging parents about their estate planning and elder care needs, but with love and support it can alleviate worry and bring about peace of mind. Consider it an opportunity to be of service to your loved ones who once took care of you. Do not hesitate to ask us your questions.
Such a simple question begs for a simple answer. Problem is that there is no simple answer, but I’ll give it a try.
First, you need to understand the difference between a revocable and irrevocable trust. The difference is that every word of a revocable trust can be changed, but in an irrevocable trust, there is AT LEAST one word that can’t be changed.
Nowadays, the reason elderly wants an irrevocable trust is to protect their assets from the prohibitive cost of care they need to receive at home, in an assisted living community, or a nursing home.
Most facing that challenge have heard that if your “stuff” – that’s what I call assets – is owned by an irrevocable trust, then they might qualify for Medicaid or other benefits. That’s true, but ONLY if the stuff was in there for 5 years. I don’t have enough space to explain the “5-year” rule this time, so you’ll just have to take my word for it.
So, here’s the answer to the question. Yes, you can change a revocable trust to an irrevocable trust by doing a “restatement” that is structured correctly to provide asset protection AND with a method for accessing your stuff if you need it. But if you need government assistance before the 5 years is up, the trust won’t work for its intended purpose.
The moral of the story is that if you are worried that you may want to protect your assets from long-term care costs, get an irrevocable trust NOW! Contact our firm with any questions you may have.