Children may not have to make as many major decisions at a difficult time in their lives.
Elder law estate planning can make the lives of adult children easier by setting major goals and tasks in the process, according to the Times Herald-Record in “Three ways for seniors to make things easier for their kids“. Those tasks are planning for disability, protecting assets from long-term care or nursing home costs and minimizing costs and stress in passing assets to the next generation.
Here’s what you need to do, and how to do it:
Disability planning includes signing advance directives. These are legal documents that are created while you still have all of your mental faculties. Naming people who will make decisions on your behalf, if and when you become incapacitated, gives those you love the ability to take care of you without having to apply for guardianship or other legal proceedings. Advance directives include powers of attorney and health care proxies.
Your power of attorney will make all and any legal and financial decisions on your behalf. In addition, if you use the elder law power of attorney, they are able to make unlimited gifting powers that may save about half of a single person’s assets from the cost of nursing home care. With a health care proxy, a person is named who can make medical decisions and base those decisions on your wishes for end-of-life care, including resuscitation and artificial feeding.
When advance directives are in place, you spare your family the need to have a judge appoint a legal guardian to manage your affairs. That saves time, money and keeps the judiciary out of your life. Your children can act on your behalf when they need to, during what will already be a very difficult time.
Goal number two is protecting assets from the cost of long-term care. Losing the family home and retirement savings to unexpected nursing costs is devastating and may be avoided with the right planning. The first and best option is to purchase long-term care insurance. If you don’t have or can’t obtain a policy, the next best is the Medicaid Asset Protection Trust (MAPT) that is used to protect assets in the trust from nursing home costs after the assets have been in the trust for five years.
The third step that will make your adult children’s lives easier, is to have a will. This lets you leave assets to the family as you want, with the least amount of court costs, legal fees, taxes and family battles over inheritances. Work with an experienced estate planning attorney to have a will created. If your attorney advises it, you can also consider having trusts created, so your assets can be placed into the trusts and avoid probate, which is a public process. A trust can be easier for children because estates subject to a trust rather than a will are likely to settle more quickly.
An estate planning attorney can advise you on creating an estate plan that fits your particular circumstances.
Reference: Times Herald-Record (July 13, 2019) “Three ways for seniors to make things easier for their kids“
