The problems that a good estate and asset protection plan will avoid are many. They are: 1.) avoiding worrying that it is not done or that it is not done as well as it should be; 2.) avoiding unnecessary court involvement and the costs related to that including the legal fees; 3.) avoiding loss of assets to pay for long term care costs; 4.) avoiding family disputes; 5.) avoiding acceleration of income taxes on IRA’s; and 6.) avoiding loss of assets to a son or daughter in-law in a divorce.
In effect, planning ahead can guarantee your assets will stay in your family, with the least amount of court involvement, costs and delay, and also avoid family disputes.
Fortunately, with some counsel, it is easy to get your affairs in order, or your ducks in a row.
The first mistake to avoid is to think that it is easy and you can do it yourself. Arguably, in no other area of law does counsel benefit the client more than in the arena of estate planning, assuming it is sought, provided, listened to and followed.
The simple reason is that simple steps taken ahead of time can guarantee success. In a way, doing estate planning is like insuring these matters will go well for you and your family.
There are two key differences, however, between estate planning and insurance. With estate planning, there is a definite benefit that will be obtained because none of us lives forever. Insurance often lapses unused.
With estate planning, there is usually a single fixed fee for the services. With insurance, there are premiums, and they continue month after month.
We might not have exposure to estate taxes, as many of us Americans do not, but we are exposed to loss of our assets due to long term care costs.
Approximately 70 percent of Americans who live to their older years are on Medicaid.
Certain steps can be taken to protect from loss, namely: 1.) a general power of attorney that authorizes your agent to do Medicaid planning; and 2.) deeding a paid-off house to kids and keeping a life estate.
Time is of the essence on some of these matters, as there is a five-year look back period that can create a period of ineligibility if gifts were made in that time.
It’s never a good idea to forego counsel when it is available. A little bit of advice, if taken, can go a very long way to protecting you and your family from many problems.
As always, a little bit of planning can make a big difference.
Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate and elder law planning attorney. www.mwinnesq.com