Life is extremely unpredictable, so it’s vital that everyone has three specific estate planning documents set up before tragedy unexpectedly strikes. These documents ensure that, if we become incapacitated or worse, someone in your life will have the authority to make medical and financial decisions on your behalf—and that they know how you would like them to make those decisions. By having just three estate planning documents in place, you can save your family time, money, stress and heartache by having these important decisions made ahead of time. Not only will you be able to rest assured that you will receive medical care and treatment in alignment with your wants and beliefs, but you will also gain peace of mind knowing that your loved ones and assets will be taken care of after you are gone.
The three documents that everyone needs are: a last will and testament, advanced directive for healthcare, and a power of attorney—or POA. These documents are crucial to setting out a plan for how you want your healthcare and assets handled.
Last Will and Testament
The last will and testament is a legal document that expresses how a person wants their estate to be distributed upon their death. If you have no will, it is called dying “intestate,” and a local probate court will determine how your assets are distributed. While the courts follow state laws to distribute your assets, your actual final wishes will be unknown. The only way to ensure your final wishes are followed through is by having a last will and testament.
Advanced Directive for Healthcare
The advanced directive for healthcare is a 2-part document and contains a living will and medical power of attorney, or healthcare proxy. The living will states what you do or do not want if you become incapacitated or injured to the point where you can or cannot survive without advanced measures. For example, your living will might state that you do not want a feeding tube, or to breathe with assistance. By setting out these instructions ahead of time, it will save your family a lot of stress and heartache, and they won’t have to wonder if they’re doing what you would have wanted. The medical POA names someone to help make these medical decisions. This person will work with your medical care team to make sure that your wishes are being granted, as well as ensuring that you’re receiving the best care possible.
Power of Attorney
A power or attorney, or POA, is designed to give someone else the authority to make financial decisions on your behalf while you are still alive. A POA will give someone else the ability to take care of your estate by doing such things as paying bills, signing important documents, selling assets, and more.
These three estate planning documents tell others what to do if you are incapacitated or pass away, leaving no questions or issues regarding your assets if drafted effectively. If you are looking for peace of mind knowing that your estate and health will be taken care of when you’re not able to physically make those decisions, then contact Miller Estate & Elder Law or register for one of our free estate planning workshops.
According to the United States Census Bureau, by 2030 one in five residents in the United States will be of retirement age. Many of us will eventually require costly long-term care in our old age. Medicaid planning is one important step that helps individuals prepare for their loved ones’ care needs or for their own future long-term care needs and should be part of every estate plan.
Medicaid planning can help individuals make the most of the financial help available for long-term care in Alabama. Since there are income and asset caps for those hoping to qualify for Medicaid benefits, Medicaid planning can provide options for protecting assets and income while still qualifying for benefits.
What Is Medicaid Planning?
Medicaid planning will depend on an individual’s circumstances and can be as simple as receiving assistance with a Medicaid application. However, ideally, Medicaid planning should commence years in advance of any potential care needs and can involve the restructuring of financial assets to ensure eligibility for benefits.
If an individual’s income or assets exceed the caps set by Medicaid, various options may be available, such as Qualified Income Trusts (QIT) and converting countable assets into non-countable assets. Other challenges that Medicaid planners can help with include asset and income division in the event that one spouse needs long-term care while the other continues to live independently.
Contacting experienced attorneys that are Medicaid planners with the appropriate legal and financial expertise can be an important step for those hoping to qualify for Medicaid. Mistakes with Medicaid planning can lead to costly and irreversible consequences.
Mistakes to Avoid with Medicaid Planning
When making plans for long-term care, consider contacting an estate planning attorney to help you determine if either you or your loved one need residential or long-term care. It can be a substantial mistake to simply ignore planning issues, as Medicaid rules and eligibility criteria for benefits are complex and timely planning is essential. However, it is never too late to get help. Even once a loved one has moved into residential care, an attorney can still help with protecting assets and receiving Medicaid benefits.
Ignoring the Look-Back Period
While it can be tempting to transfer large sums to children or grandchildren in order to qualify for Medicaid benefits, in many instances this can be a detrimental decision. Your financial transactions will be subject to review going back several years. The so-called “look-back period” is currently 60 months in Alabama, according to Medicaid.
Other mistakes to avoid with Medicaid planning can include:
● Applying too early or too late
● Not having a power of attorney
● Not taking advantage of spousal protections
● Taking advice from friends and family rather than seeking professional help
Call Miller Estate and Elder Law Today for Medicaid Planning
Do not procrastinate when it comes to Medicaid planning. If you are reaching retirement age, planning for potential long-term care needs can be essential for your future financial health. An experienced elder law attorney from our firm can help you with all aspects of Medicaid planning, including but not limited to:
● Medicaid applications
● Meeting income and asset limits set by Medicaid
● Protecting your income and assets
● Assisting you with long term planning and immediate crisis situations
● Making sure your spouse’s income and assets are protected
Due to the look-back period, planning well in advance can be important. Contact Miller Estate and Elder Law today to find out how we can help you: 256-472-1900.
With the US population aging, life expectancy increasing, and events like the Covid-19 pandemic showing us that no one’s health is secure, new awareness has arrived concerning the need for a long-term care plan. This is great news and yet with increased awareness comes an increase in the circulation of misinformation. In a bid to clear the air, we address four of the most common misconceptions concerning long-term care planning below.
1. If you or your spouse enters a nursing home, the state will seize your assets.
Medicaid, the state and federal government-sponsored program that millions of US adults rely on to pay for long-term care needs, seizes nothing when you enter a nursing home. Instead, the program simply will not chip in a dime until you, yourself, have spent down your “countable” assets to a level that qualifies you for assistance. This does not mean only very low-income individuals are eligible to receive Medicaid, however; it simply means that you need to work with an experienced estate planning attorney well ahead of time to put a plan in place to protect assets so that you are able to qualify for Medicaid more quickly when the time comes.
2. If you use Medicaid to pay for care, you risk losing your home.
This misconception is similar to the above but deserves a separate address because of how often it is repeated.
As long as the person using Medicaid (the beneficiary) or their spouse continues to live in their home, it can neither be taken nor forcibly sold. This is the case even if you are single as long as you communicate your “intent to return home” in writing when you enter a nursing home.
It is true that upon your death, the state can file a claim against your estate (which includes your home) in order to repay nursing home expenses covered by Medicaid but even this can be avoided with help from an experienced attorney.
3. Making a financial gift disqualifies you from Medicaid for five years.
Medicaid employs a look-back period wherein any financial transfers or gifts made in the five years prior to applying for the program may be counted against your eligibility. This does not mean you will be barred from receiving benefits if you make a gift during this period. However, it does mean that you may have to endure a penalty period before Medicaid picks up the cost of your care.
This penalty is based on the value of the gifted assets made and how many days of long-term care they could have been used to pay for. Once more, an experienced estate planning attorney can help you work out specifics and determine the most affordable way for you to gain the coverage you need.
4. It is too late to start long-term care planning.
All too often, folks who are already receiving nursing home care or those with imminent need assume it is too late to engage in planning that preserves their assets. This is simply never true. You can always, for instance, use cash to pay down your mortgage and thereby convert a non-exempt asset into an exempt asset and thus save thousands. While it is always better to begin planning early, such last-minute strategies help you retain a large percentage of all that you have worked so hard to gain.
To learn more about long-term care planning or emergency strategies to ensure you have the coverage you need, do not hesitate to call Miller Estate and Elder Law at (256)251-2137 or reach out via the contact form on our website.
The holiday season is now officially over, school is back in session, and 2021 is off to the races. As routine sets in, now is a good time to look back on the past year, think about what you may have learned, and set that knowledge in motion to ensure this next year is better. Ask: If this were January 2020 all over again, what would I do? Alongside buying up Tesla, Amazon, and Etsy stock (Etsy? Yes, Etsy), moving to the country, and stockpiling hand sanitizer, finally getting that estate plan in order should be on your list. After all, 2020’s big takeaway was that being prepared is paramount because nobody knows what tomorrow may bring.
Getting Started on a Plan
While your plan’s composition will depend on your personal, family and financial situation, foundational documents always include a Will, Advance Medical Directive, Living Will, and Financial Power of Attorney. Whether you go the Trust-Based or Will-Based route will determine whether you sign a Last Will and Testament or a Pour Over Will together with a Revocable Living Trust. If that all sounds like a lot to absorb, it is. But don’t worry; you don’t need to worry about any of it.
An experienced estate planning attorney will do the work of determining the composition best-suited to your needs and goals. They will explain each element and its purpose and will work with your input to ensure your plan is the best possible fit. Instead of thinking about documents, then, you need to think about the following:
1. Your Net Worth
The first step to launching a plan is figuring out what it will include. This means totalling the value of bank and investment accounts, personal property, retirement plans (401ks, IRAs), life insurance benefits, business interests, and real estate and then subtracting the total of your liabilities. As you do so, you should also list any items of sentimental value and make note of passwords to your online accounts.
2. Your Family’s Needs
Step two in the estate planning process is sitting down with loved ones and chatting about needs and goals. This is the time to address such delicate issues as unequal inheritances (and why fair doesn’t always mean equal), sentimental items, retirement goals, and long-term care wishes. It is also the time to determine the people best-suited to serve as executor, medical power of attorney, and financial power of attorney. In having this chat, nothing need be finalized; instead, the goal is simply to get everyone on the same page.
Once you have taken care of these two preliminary steps, the hard work is done. From here, you pass the ball to a qualified, trusted attorney. In conversation with you, they will assess all of the information you have gathered and get to work designing a plan which will you ensure you peace of mind not only for this coming year, but for many years to come.
On Friday, December 11 the Food and Drug Administration (FDA) approved Pfizer’s Covid-19 vaccine for emergency use. Over the next week, an initial shipment of 2.9 million doses will be sent around the US and highly vulnerable people will begin to breathe easy for the first time in almost a year. This wonderful news brings nation-wide relief and yet it comes with the lurking danger that we forget the lessons Covid-19 has so rudely taught.
Everyone has heard the age-old adage that you never know what tomorrow may bring and that prevention is the best medicine and yet for many, it took a pandemic to grasp the profound truth of these statements. Covid-19 ravaged (and continues to ravage) communities, provoking unexpected deaths and causing thriving businesses to shutter. Individuals have been able to do little beyond wear a mask, maintain social distance, and plan for the worst while hoping for the best.
If it is true that most Americans will be vaccinated by June, masks and social distancing will soon be a thing of the past but the importance of planning will remain—especially for the aging and the vulnerable. After all, even in a post-Covid world, you still never know what tomorrow holds. Having an estate plan in place means that while you cannot control the future, you can ensure your life’s work is protected and your family is secure.
Four Estate Planning Tips for Seniors (And Any Other Mortal Adult)
1. Start Now
As obvious as this one may sound, its importance cannot be overstated. Not only has the future not yet been written but many of the most powerful estate planning legal instruments work best if employed with foresight. Ensuring you qualify for Medicaid is a prime example. Some 70% of folks over 65 will need long-term care services in their remaining years and yet most will neither be able to shoulder the cost nor qualify for Medicaid. Advance planning provides a solution but because Medicaid employs a five-year look-back period when assessing candidates, time is of the essence.
2. Talk to Family and Loved Ones
Estate planning begins with a conversation between you and your loved ones. Should tension and fallings out be avoided down the road, it is crucial that you talk about goals and plans now. List your assets and seek input on how they might be divided, explain any sensitive decisions you might make, and determine who is best suited to serve in the roles of executor, medical, and legal power of attorney.
3. Seek Out an Experienced Attorney
Fancy Pinterest cookies are a DIY project; estate planning is not. While the internet is rife with websites that offer low-cost will, power of attorney, and other legal documents, these services do not keep up to date with constantly changing legislation and are rarely state-specific. While failed cookies might mean a ruined evening, a failed estate plan can mean years of ruinous consequences for your life’s work and your loved ones.
4. Think Long-Term
A DIY kit may seem like the obvious choice at a time when in-person meetings are limited and the need for a plan is urgent, but such short-term thinking often creates problems down the road. A poorly-drafted plan can result in unintended tax consequences, the bank refusing to accept your power of attorney, failure to properly exclude family members you wish to disinherit, and a host of other issues. If cognitive decline sets in and your medical power of attorney is improperly drafted, loved ones may have difficulty advocating for you when you need it most. And should you die before rectifying these issues, the financial and emotional cost of doing so can be enormous. While there is no denying that working with an experienced estate planning attorney is an expense, in the long term it is often cheaper than not doing so.
At Miller Estate and Elder Law we are only interested in working with clients to whom we can bring value. That means that if we chat and we determine we cannot be of assistance in your case, you will not see a bill. If we can help you secure a brighter, more peaceful future, however, it would be our pleasure to work together.
Should you like to learn more or gain greater insight into our practice, check out our free workshops, which are currently available both live and in pre-recorded format so that you can enjoy them from the safety and comfort of your own home. You can also contact us to set up your consultation.
If there were ever a year to buckle up and learn a little bit about estate planning, this is it. After all, while 2020 is behind us and hope is on the horizon the Covid-19 pandemic has made it amply clear that the future is uncertain and preparedness is the best defense. Estate planning plays a part in this. Not only does having a plan protect your hard-earned assets from avoidable taxes, aggressive creditors, and potential reckless spending by heirs, it also ensures your loved ones are spared the cost and burden of probate court should the unthinkable happen.
What Is Probate?
Probate is the state-run, court-sponsored process of authenticating a person’s last will and testament. It is the place that evaluates a passed loved one’s assets, pays their final bills and taxes, and distributes what is left over to beneficiaries. As simple as this all sounds, the reality is a minefield of contentious family decisions, legal costs, and changing legislation. Each state determines their own probate laws and they are subject to regular update and so attempting to administer probate yourself or with the help of an automated service is a gamble of both resources and time.
An experienced probate attorney can help you avoid all of this but the financial cost is often greater than organizing an estate plan and the emotional burden is untold.
Avoiding Probate
Hassle and associated fees are not the only reason to avoid probate; for some, they are not even the main reason. While awaiting probate, your heirs will not see a penny and may not have access to your accounts. They will need to pull from their own pockets to cover not only court costs, but property insurance, taxes and even storage fees until probate is officially opened. In present times, when so many peoples’ finances are already stretched to the limit, this can be devastating.
Another reason to skirt probate is that records are public and available to anyone to view. You would not want your bank balances shared openly while living and there is no reason you would want otherwise once you have passed on.
In addition to expediting the process and saving on the cost of distributing your assets, an estate plan that avoids probate is also private. It keeps everything in the family, literally.
The first step to getting an estate plan off the ground is to list all you own and organize a family meeting. Once you have addressed the delicate subject of inheritances and chatted about who might serve as executor, financial power of attorney, and medical power, the next step is to reach out to a trusted and experienced estate planning lawyer.
Your attorney, guided by your goals and wishes, ensures the rest is easy. In less time than you think and at a fraction of both the financial and emotional cost of probate, you’ll have your affairs in order and you’ll move on to living your life secure in the knowledge that at least one of the future’s big uncertainties no longer looms on the horizon.
