Today’s estate and financial planning is not your parents’ planning.
In your parents’ day, life was simpler. They might have had a will. Depending on your experience, you might or might not be aware of how beneficial a good up-to-date estate plan can be for your peace of mind and the well-being of your family.
The protection one can obtain by getting a good trust-based estate plan takes a variety of forms, namely:
- protection from unnecessary administrative costs, taxes in probate, and excessive legal fees;
- protection from family disputes;
- protection from losing your assets to in-laws or creditors of your children by using blood-line trusts;
- protection from losing all your assets to long term care costs by planning for Medicaid and or making this planning possible if you become disabled;
- protection from acceleration of income taxes on retirement accounts and estate taxes, if applicable.
Today, the biggest issue I see facing many of my clients is the prospect of planning for long term care costs. Simply stated, if your papers do not authorize Medicaid planning to be done for you, then it will not be able to be done.
The result could be the full dissipation of all your assets – leaving none for your children or other loved ones. For those who wish to make sure to leave something for their children, we often recommend to our clients who wish to preserve assets for their children to divest themselves now of the future interest in their house.
They can keep the full and absolute right to live there during their life, but if they divest the future interest to their children or to a trust for their benefit now, then in five years that transfer will not create a period ineligibility for Medicaid. And if the state ever seeks to take the house to recover its expenditure on you, it will not be able to because your life interest will die with you.
In effect, this leaves the estate nothing to get because the children already own the future interest.
Good estate planning is critical to success in these areas. The fees and costs saved, along with the assets protected now and in the future can provide you and your family with peace of mind.
After serving the public in these matters for more than 15 years, the greatest reward I receive when I help people is their peace of mind.
As always, a little 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. mwinnesq.com