Don’t Send Your College Student Off to Campus Without These 3 Legal Documents

Don’t Send Your College Student Off to Campus Without These 3 Legal Documents

by | Aug 24, 2023 | Blog, Estate Planning, Healthcare Proxy, trust

3-legal-documents-every-college-student-needs

Estate planning isn’t usually a top priority for college students. In fact, for most incoming freshmen (and returning sophomores, juniors, and seniors…) estate planning doesn’t even crack the top 10 priorities on their list. However, there are certain legal documents that everyone over the age of majority really should have in place, and the implications of not having these documents in place can be quite dire. Below we will outline 3 legal documents that every college student needs.

It’s important to remember that your college student isn’t just embarking on an academic journey; they are heading out into the world to explore their independence. Once they reach the age of majority—18 in most states, and 19 in Alabama—you will lose many of the parental rights you once had. Without certain legal documents in place, you will not have access to their medical records, or be able to make medical or financial decisions on their behalf.

To protect your college-aged child, these are the 3 legal documents that every college student needs.

Healthcare Proxy

A healthcare proxy—also known as a medical power of attorney or advanced healthcare directive—is a legal document that allows a named agent to make medical decisions on your child’s behalf, should they become incapacitated. For college students who are living away from home, this document is essential in ensuring that someone they trust will be responsible for making medical decisions on their behalf, should they become unable to make their own decisions. The healthcare proxy should clearly outline the appointed agent’s authority to make medical decisions, and the types of medical treatments the student is willing to accept or refuse.

Having a healthcare proxy can provide peace of mind to both the college student and their family. The student can trust that they will receive medical care along their own guidelines, while the parent can rest assured that they—or another trusted loved one—will be able to make important decisions on their child’s behalf, should tragedy strike.

Durable Power of Attorney

A durable power of attorney grants an authorized third party the authority to manage your student’s financial affairs, and otherwise make financial decisions on their behalf. This document becomes crucial if the college student faces a medical emergency and is unable to pay bills or conduct legal transactions due to incapacitation.

Whether it’s managing bank accounts, paying bills, or handling rental agreements, a durable power of attorney ensures that someone capable and reliable will oversee these important matters. Most students choose a parent, guardian, or close family member to hold this responsibility.

HIPAA Authorization

Due to HIPAA regulations, if your child is over the age of majority, you will not be able to access their medical records unless they proactively signed a HIPAA authorization. A blanket HIPAA authorization can be included as part of the healthcare proxy, or signed as its own independent document.

College students may feel invincible in their youth, but unforeseen circumstances can occur at any age. Estate planning is a responsible step that every adult should take to protect themselves and their assets, even if you don’t have much in the way of cash, real estate, or property. By drafting these three essential legal documents—a healthcare proxy, a durable power of attorney, and a HIPAA authorization—college students can ensure their wishes are respected, their medical care is managed appropriately, and their financial affairs will be taken care of, even if they are not able to do so themselves.

It’s crucial to consult with a qualified estate planning attorney to ensure that the right documents are in place, and that they are legally sound and tailored to your student’s unique needs. With these important documents in place, college students can focus on their, ahem, studies…with added confidence and security.

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

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7 Questions and Answers on Estate Planning for Second Marriages

7 Questions and Answers on Estate Planning for Second Marriages

by | Aug 10, 2023 | Asset Protection, Blog, Estate Planning, trust

estate-planning-for-second-marriages

Estate planning is a crucial step for everyone—regardless of marital status. However, when it comes to second marriages, it becomes even more important to carefully consider your estate planning decisions. Second marriages often involve complex family dynamics, multiple sets of children, and various financial considerations that can greatly impact the distribution of assets after one’s passing. To ensure your wishes are respected and your loved ones are taken care of, here are 7 answers to common questions on estate planning for second marriages.

1. Should I update my estate plan after getting remarried?

Absolutely! Remarrying is a significant life event that necessitates a review and potential revision of your estate plan. Failing to update your plan can result in unintended consequences—such as assets being distributed contrary to your wishes or excluding your new spouse or stepchildren from inheriting. Take the time to reassess your estate plan and make the necessary adjustments.

2. How can I protect my assets for my children from a previous marriage?

When entering a second marriage, you may have children from your previous marriage whom you wish to provide for. A carefully crafted estate plan can help protect your assets and ensure they are passed on to your children as intended. Options such as setting up a trust or using a prenuptial agreement can help safeguard your children’s inheritance.

3. What happens if I don’t have a prenuptial agreement?

In the absence of a prenuptial agreement, your state laws will dictate how your assets are divided upon your death or divorce. These laws may not align with your wishes or protect the interests of your children from a previous marriage. By working with an experienced estate planning attorney, you can create a plan that ensures your assets are distributed according to your specific wishes.

4. How can I provide for both my current spouse and my children?

Balancing the needs of your current spouse and your children from a previous marriage can be challenging—utilizing a trust can be an effective solution. A trust can be set up to provide income or support to your spouse during their lifetime while preserving the remaining assets for your children after your spouse’s passing.

5. What if my spouse and I own property together?

Owning property jointly with your spouse can complicate estate planning matters. It’s essential to discuss how you want the property to be distributed upon either of your deaths. Options include structuring joint ownership with rights of survivorship or creating a trust to hold the property and determine its distribution.

6. How can I protect my spouse in case I become incapacitated?

In addition to planning for the distribution of your assets after death, it’s crucial to address potential incapacity during your lifetime. Consider creating a durable power of attorney and a healthcare directive to designate someone you trust to make financial and medical decisions on your behalf if you are unable to do so.

7. Where can I find more information and guidance?

Miller Estate and Elder Law offers a valuable resource specifically dedicated to estate planning for second marriages. Access a comprehensive guide and gain further insight into estate planning considerations for second marriages here.

Estate planning for second marriages requires careful thought and consideration. By addressing the unique challenges and complexities that come with blended families, you can ensure that your wishes are carried out and your loved ones are provided for. Consult with an experienced estate planning attorney to create a personalized plan that reflects your goals and protects your family’s future.

The comprehensive resources available at Miller Estate and Elder Law can help you navigate the complexities of estate planning and make informed decisions for your blended family. Contact our office today at (256) 251-2137 or fill out the form below.

 

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

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bill@millerestateandelderlaw.com

How to Estate Plan for Children in a Blended Family

How to Estate Plan for Children in a Blended Family

by | Aug 7, 2023 | Asset Protection, Blog, Estate Planning, trust

blended-family

Beginning a new relationship later in your life can be an exciting development. You’ve learned a great deal from past experience—and you’re ready to begin again from a more mature and responsible position. This means that making decisions in your estate planning will be key to building your new life the way you want. However, if either you or your new partner have children, it can create some complications when it comes to providing for your heirs. There are many things to consider when it comes to drafting an estate plan for a blended family. By talking things over with everyone involved, you can ensure that there are no surprises later.

Considerations For Estate Planning in a Blended Family

When it comes to drafting an estate plan for children in a blended family, here are a few important things to consider:

  • All Heirs are Not the Same. It may seem like you must provide for your children and stepchildren in the same way once becoming one big family. However, this is a common misconception. While you may be close with your stepchildren, it’s okay to acknowledge that your relationship with them is not the same as with your own kids. It’s important to protect your children when it comes to crafting your new estate plan and to make sure that everyone is aware of your decisions.
  • You’ll Need to Update Both Your Will and Your Beneficiaries. Any time you marry—whether it’s the first time or the third—you’ll need to significantly alter your estate plan. An entirely new set of circumstances, both personal and legal, are at play. While updating your will may seem like a no-brainer, be sure to look over all of your life insurance, bank, and retirement accounts. You will likely want to update your beneficiaries on these accounts as well.
  • What Happens If One Partner Passes Away First? When you remarry, you will likely have assets that you bring to the marriage. During the marriage, you will also accumulate mutual marital assets. This distinction becomes important should one partner die before the other. If you don’t properly plan for what will happen to both sets of assets, you may find that the wrong person receives property after the partner’s death—for example, a stepchild instead of a biological child.
  • Hiring an Experienced Estate Planning Lawyer. It’s essential to hire an experienced attorney who knows the ins and outs of estate planning. They’ll make the process run as smoothly as possible.

Estate planning in any family can be a complex process, but it becomes even more complicated when you’re in a blended family. At Miller Estate & Elder Law, we understand these unique challenges. Download our free guide and e-book, Estate Planning for Second Marriages—or give us a call at 256-472-1900—to begin protecting your children and family today.

 

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

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bill@millerestateandelderlaw.com

Get the Facts: 10 Surprising Long-Term Care Statistics

Get the Facts: 10 Surprising Long-Term Care Statistics

by | Jul 14, 2023 | Asset Protection, Blog, Elder Law, Estate Planning, Medicaid, Medicaid Planning, trust

older man nursing home resident sitting at dinner table with nurse smiling

When it comes to long-term care, many people are unaware of the potential costs, and the likelihood of needing such care in their lifetime. Planning in advance for long-term is crucial to safeguarding your assets and ensuring a financially secure future. Below, we’ll explore ten surprising long-term care statistics that highlight the importance of proactive planning.

1. Probability of Needing Long-Term Care

According to the Administration for Community Living (ACL), 70% of people aged 65 and older will require some form of long-term care in their lifetime. This statistic underscores the need for adequate preparation.

2. Average Length of Care

The average duration of long-term care is approximately three years. It’s essential to consider the potential financial and emotional impact of extended care needs.

3. Caregiving by Family Members

Family members provide the majority of long-term care, with around 83% of elder care being provided by unpaid family caregivers. This not only highlights the significant role that families play in the caregiving process, but also the lack of education around how to become a paid caregiver—yes, that IS an option!

4. The Rising Cost of Care

Long-term care costs are on the rise. The annual median cost for a private room in a nursing home is approximately $105,850 a year, while a home health aide costs around $56,056 per year. These expenses can deplete savings quickly if not planned for in advance.

5. Medicaid as a Primary Payer

Medicaid becomes the primary payer for long-term care services for many individuals. Around 62% of nursing home residents depend on Medicaid to cover their care costs. Medicaid has strict eligibility requirements, with a look-back period of 5-years. Once again, advanced planning is crucial in order to qualify for this government program—you may not need it now, but now IS the time to start planning.

6. Gender Disparity in Caregiving

Women tend to shoulder the majority of caregiving responsibilities. In fact, women are more likely to be informal caregivers, and provide care for longer durations compared to men.

7. Impact on Spousal Care

Approximately 75% of married seniors will require long-term care services, with the majority of care provided to a spouse. This emphasizes the need for spousal planning to protect both partners. Do you know what to do if your spouse needs nursing home care?

8. Informal Caregiver Burnout

The strain of caregiving can lead to caregiver burnout. Nearly 40% of caregivers for older adults experience significant psychological distress due to the demands of caregiving.

9. Limited Coverage by Health Insurance

Most health insurance plans, including Medicare, only cover a limited amount of long-term care costs, leaving individuals responsible for a substantial portion of their care expenses. Planning well in advance of needing care can help ensure you don’t lose your life savings to the nursing home.

10. Financial Impact on Families:

The cost of long-term care can pose a significant financial burden on families. It’s estimated that 15% of caregivers had to reduce their work hours or quit their jobs altogether to accommodate caregiving responsibilities. The good news is that many caregivers can qualify to receive compensation for their caregiving responsibilities—ask us about how you can become a paid caregiver in Alabama.

These surprising long-term care statistics should serve as a wake-up call for individuals and families who want to plan for and secure their future. Being proactive and exploring options like long-term care insurance, setting up a Medicaid Asset Protection Trust, or consulting with an elder law attorney can help protect your assets and ensure a secure future. By planning well in advance, you can alleviate financial stress and focus on providing the best possible care for yourself or your loved ones. Remember, the time to plan is now—and we can help!

If you or a loved one is getting close to nursing home age, contact us to learn your options, and get a plan in place for the future. Call (256) 251-2137 or contact us using the brief form below:

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

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bill@millerestateandelderlaw.com

When to Form a Medicaid Asset Protection Trust

When to Form a Medicaid Asset Protection Trust

by | Jun 20, 2023 | Asset Protection, Blog, Estate Planning, Medicaid, Medicaid Planning, trust

house shaped cookie cutter with lock and money

If you’ve been following our blog, you’ve learned that—with a little planning—even middle-class American homeowners can qualify for Medicaid coverage. You’ve started exploring your options, and maybe you’ve even heard of Medicaid Asset Protection Trusts. This powerful legal tool could help you gain the long-term care coverage you’ll likely need in old age…but the sooner you start planning, the better.

What You (Really) Need to Know About Medicaid Asset Protection Trusts

Medicaid Asset Protection Trusts (MAPT) are a special type of irrevocable trust designed to shield assets from being counted as part of your Medicaid eligibility determination. When properly designed, they allow you to transfer assets out of your name, and remove them from your personal ownership. On paper, you cease to be the owner of whatever you place in the trust, while still retaining certain benefits and some control over everything you’ve worked a lifetime to earn. The primary objective with a MAPT is to protect your life’s work from being depleted to pay for nursing home costs (which can be exorbitant).

How Medicaid Asset Protection Trusts Work

When a MAPT is created, the individual—known as the grantor—transfers assets into the trust. The grantor names a trustee (either a trusted loved one or professional advisor) to manage the trust and make distributions according to the trust’s terms, which you set. By transferring assets into the trust, you, the grantor, effectively surrender ownership, yet retain control by virtue of determining how the assets can and cannot be used. Since Medicaid has a look-back period of five years, all of this needs to happen far in advance of when you anticipate needing Medicaid coverage. This will help you avoid penalties.

When to Get Started on Your Medicaid Asset Protection Trust

There are two common situations in which you might need a MAPT:

  1. Planning for long-term care: If you anticipate the need for long-term care in the future, creating a MAPT early helps safeguard your assets and avoid penalties.
  2. Preserving family wealth: By establishing a trust, you protect your assets from being spent down to cover nursing home expenses, ensuring that your loved ones can inherit your wealth…and not the nursing home.

A Medicaid Asset Protection Trust provides a strategic means to protect your assets while ensuring you remain eligible for Medicaid benefits. By transferring your assets into this type of irrevocable trust, you safeguard your life’s work for your family’s future benefit, while making sure you have access to the care you need. If you’re considering establishing a MAPT, it’s important to work with an experienced estate planning attorney who can steer you clear of pitfalls and penalties that are otherwise hard to avoid.

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

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Is Selling Your House for $1 A Good Idea?

Is Selling Your House for $1 A Good Idea?

by | May 30, 2023 | Blog, Estate Planning, trust

memory care

Transferring property to a child or other relative can be tricky business. Essentially, houses and other property are valuable assets, and if there is a chance you may be applying for Medicaid, some people think they can get around these penalties by selling their house for a dollar. However, this strategy can lead to a number of problems for you or your family members.

The Gift Tax and Real Estate Sales

While it may seem like you are clearing a big asset off your books by selling it to your child, the tax burden will be kept in the family.

For one, the IRS is will not recognize the transaction as a legitimate sale, and you may still be subject to either a gift or estate tax. If you sell your house for $1, the IRS will not consider this a sale, but instead a gift. So, for example, if your house is valued at $300,000 and your child buys it for $1, it is considered a gift in the amount of $299,999. You would be on the hook to pay a gift tax on the majority of this value if your estate is otherwise large enough to owe gift/estate taxes.

If after selling your house to your child for $1, they decide to sell it at fair market value, they will have to pay a capital gains tax on the property. Since the initial transfer to your child would be considered a gift, the tax basis for the property would be based on the amount that you initially purchased the house for plus the cost of any improvements – known as the adjusted basis.  Say you bought your house for $50,000 and made no improvements, and your child sells it for $300,000 after buying it for $1. They would pay capital gains taxes on the $249,999 difference.  Anytime you gift property, the donee gets a carryover basis.

How a Sale Could Affect Medicaid Application

Almost more importantly is the question of how selling your house for $1 could affect your ability to qualify for Medicaid in the future. If you sell your house to your child for $1 to try to spend down your assets, and then apply for Medicaid within 5-years of that transaction, you will incur a penalty that will keep you from receiving Medicaid benefits for many months when you otherwise might have received those benefits.

The bottom line is that there is no way to fully avoid paying taxes when it comes to transferring valuable properties, such as a house, to your loved ones. By working with an experienced estate planning attorney, however, you will be able to minimize the tax burden that you or your loved ones will have to pay.

Contact Miller Estate and Elder Law

At Miller Estate and Elder Law, we have many years of experience when it comes to helping people strategically transfer property to their children and loved one. To find out more, do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.




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256-472-1900

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